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%T Mechanism design with level-k types: theory and an application to bilateral trade %A Kneeland, Terri %P 29 %V SP II 2017-303 %D 2017 %~ WZB %X This paper studies mechanism design under the level-k solution concept. The first result gives a general necessary condition for a social choice rule to be level-k implementable. In some environments, this necessary condition is equivalent to Bayesian incentive compatibility, making level-k implementation more restrictive than Bayesian implementation. The second result shows that this is not a general implication. In the bilateral trade environment ex post efficient trade is always possible under level-k implementation. Further, ex post efficient trade is possible in a mechanism that is robust to different specifications of beliefs about the levels of reasoning of others and to any specification of beliefs about payoffs. %C DEU %C Berlin %G en %9 Arbeitspapier %W GESIS - http://www.gesis.org %~ SSOAR - http://www.ssoar.info