Designing Economic Mechanisms

This book presents methods for designing institutions that direct and co-ordinate economic activity to achieve specified goals.

This book presents methods for designing institutions that direct and coordinate economic activity to achieve specified goals. Leonid Hurwicz is the joint Nobel Price Winner 2007 for The Sveriges Riksbank Prize in Economic Sciences. The book makes mathematical material accessible to economic theorists, applied economists and graduate students.

1. Mechanisms and mechanism design; 1.1. Introduction to mechanisms and mechanism design; 1.2. Environments and goal functions; 1.3. Mechanisms: message exchange processes and game forms; 1.4. Initial dispersion of information and privacy preservation; 1.5. Mechanism design; 1.6. Mechanism design Illustrated in a Walrasian example; 1.7. The rectangles method applied to the Walrasian goal function-informal; 1.8. Introductory discussion of informational efficiency concepts; 1.9. Regulation of logging in a national forest - an example of mechanism design; 2. From goals to means: constructing mechanisms; 2.1. Mechanism construction: phase one; 2.2. Phase two: constructing decentralized; 2.3.1. Flagpoles-principles; 2.4.1. Phase two: via condensation: principles; 2.5. Overlaps; 2.6.1; Main results; 3. Designing informationally efficient mechanisms using the language of aets; 3.1. Introduction; 3.2. Mechanism design; 3.3. Mechanisms and coverings; 3.4. A systematic process (an algorithm) for constructing and rRM covering; 3.5; Transversals; 3.6. Coverings and partitions; 3.7. Informational efficiency; 3.8. Example 1.9 revisited - a graphical presentation; 3.9. Informationally efficient mechanisms with strategic behavior; 4. Revelation mechanisms (co-authored with Kenneth R. Mount); 4.1. Introduction; 4.2. Initial set theoretic constructions; 4.3. The topological case; 4.4. Proofs and examples.