Thoughts on Social Design
One of the fundamental problems in applications of methods and results from mechanism design and implementation theory is the effective enforcement of theoretically established equilibria by which social choice rules are implemented. Hurwicz (The American Economic Review 98(3):577–585, 2008) and Myerson (Review of Economic Design, 13(1–2):59, 2009) introduce different concepts of formalizing enforcement of institutional rules via the introduction of legal and illegal games. In this note the relation of their concepts with that of a social system defined in Debreu (Proceedings of the National Academy of Sciences, 38(10):886–893, 1952) is analyzed and its potential of being instrumental for modelling institution design is discussed. The existence proof for such a system, also known as generalized game or abstract economy had been the basis for the existence proof of a competitive equilibrium of an economy.
This work was partially supported by the German Research Foundation (DFG) within the Collaborative Research Centre “On-The-Fly Computing” (SFB 901).
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