The theory of implementation when the planner is a player

In this paper we study a situation where the planner cannot commit to a mechanism and the outcome Function is substituted by the planner herself. We assume (i) agents have complete information and play simultaneously and (ii) given the messages announced by the agents, the planner reacts in an optimal way given her beliefs. This transforms the implementation problem into a signaling game. We derive necessary and sufficient conditions for interactive implementation under different restrictions on the planner's out-of-equilibrium beliefs. We compare our results to standard results on Nash implementation. (C) 1997 Academic Press.