Econometrica: Jan 1986, Volume 54, Issue 1
Realization and Nash Implementation: Two Aspects of Mechanism Design
Steven R. WilliamsThis paper relates the issue of efficiency in communication to the problem of designing games that implement a given objective in Nash equilibrium. A message process that "realizes" (or computes) the objective is used to construct a game that implements it in Nash equilibrium. Any efficient encoding of information that occurs in the message process causes a reduction in the size of the strategy space of the game that is constructed. Necessary and (stronger) sufficient conditions on the message process are given for this construction.
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