On Detail-Free Mechanism Design and Rationality

Mechanism design theory has been criticized, because mechanisms depend on the detail of specification and agents’ behaviour relies on strong rationality assumptions. Hence the study of “detail-free” mechanism design with weak rationality is important as a practical theory. This paper emphasizes that, even if we confine our attention to detail-free mechanisms with weak rationality, there exists plenty of scope for the development of new and significant ideas. I describe my recent work along these lines, and argue that stochastic decisions work in large double auction environments, and that moral preferences improve the implementability of social choice functions.