revelation principle

The revelation principle is useful in game theory, Mechanism design, social welfare and auctions.

Thanks to mechanism design, and particularly the revelation principle, the principal need only consider games in which agents truthfully report their private information.

In Mechanism design the revelation principle is of utmost importance in finding solutions.

Thanks to the revelation principle, the designer can usually find a transfer function to implement a social choice by solving an associated truthtelling game.

For dominant strategies, instead of Bayesian equilibrium, the revelation principle was introduced by Gibbard (1973).

"revelation principle" by Roger B. Myerson.

Thanks to a sweeping result called the revelation principle, no matter the mechanism a designer can confine attention to equilibria in which agents truthfully report type.

He authored many journal articles, and defined the revelation principle and random matching, as applied in works with Henry Landau.

They rely on what has been labeled the revelation principle where planners must implement a tax system that provides proper incentives for people to reveal their true wage earning abilities.

The revelation principle states: "For any Bayesian Nash equilibrium there corresponds a Bayesian game with the same equilibrium outcome but in which players truthfully report type."

The revelation principle says that for every arbitrary coordinating device a.k.a. correlating there exists another direct device for which the state space equals the action space of each player.

The revelation principle of economics can be stated as, "To any Bayesian Nash equilibrium of a game of incomplete information, there exists a payoff-equivalent revelation mechanism that has an equilibrium where the players truthfully report their types."

If a resource allocation rule is efficient but there is no incentive to abide by that rule or accept that rule, then the revelation principle asserts that there is no mechanism by which this allocation rule can be realized.

Townsend began his work as a theorist in general equilibrium models and contract theory/mechanism design, but is known primarily for his work on revelation principle, costly state verification, optimal multi-period contracts, decentralization of economies with private information, models of money with spatially separated agents, and forecasting the forecasts of others.