In this section, we review several closely related branches of research that have contributed to the understanding of mechanisms design in economics. These include:
- Mediated Equilibrium: Dov Monderer and Moshe Tennenholtz introduced the concept of mediated equilibrium, which involves a third-party mediator interfering with a game to influence the outcomes obtained by rational players. This approach has been used to study the impact of communication on Nash equilibria in normal-form and Bayesian games.
- Mechanism Design: The aim of mechanism design is to design the set of strategies of players and define their utilities to achieve a desired outcome. This branch of research focuses on the design of mechanisms that can influence player behavior and lead to desirable outcomes.
- Cheap-Talk Mechanism Design: Aumann considered the inclusion of a cheap-talk mediator in normal-form and Bayesian games, allowing players to communicate with each other before making decisions. This extension has been used to study the impact of communication on Nash equilibria in these games.
- Communication Equilibrium: Forges considered the same extension in Bayesian games and gave a geometric characterization of the resulting equilibria, which were labeled as communication equilibria.
- Program Equilibrium: Moshe Tennenholtz defined program equilibrium, which is a concept that extends the idea of Nash equilibrium to include the possibility of multiple strategies for each player. This approach has been used to study the impact of communication on the outcomes of games.
These related branches of research have contributed to our understanding of how communication can influence the outcomes of games and have shed light on the importance of considering communication in the design of mechanisms. By combining these concepts, we can gain a deeper understanding of how communication can be used to achieve desirable outcomes in economics.
