Abstract
When an arbitrator lacks complete information about the dispute in question, he may have to turn to the disputants themselves to provide information. If they know how the information is to be used, they may have incentives to hide the truth. By using the players reports as checks on each other, a completely ignorant arbitrator of a dispute between two completely informed players can induce truthful revelation in the sense that the truth is a Nash equilibrium of the game which the arbitrator's decision process imposes on the players. Such a scheme may be used in conjunction with any one from a class of functions which select Pareto-optimal, individually-rational outcomes in two-person normal-form games.
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Research supported by Nat. Sc. Found. Grant No. SOC-7401790.
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Kalai, E., Rosenthal, R.W. Arbitration of two-party disputes under ignorance. Int J Game Theory 7, 65–72 (1978). https://doi.org/10.1007/BF01753235
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DOI: https://doi.org/10.1007/BF01753235