Mechanism design (sometimes called reverse game theory) is a field in game theory studying solution concepts for a class of private information games. The distinguishing features of these games are:
- that a game "designer" chooses the game structure rather than inheriting one
- that the designer is interested in the game's outcome
Such a game is called a "game of mechanism design" and is usually solved by motivating agents to disclose their private information. The 2007 Nobel Memorial Prize in Economic Sciences was awarded to Leonid Hurwicz, Eric Maskin, and Roger Myerson "for having laid the foundations of mechanism design theory".
Read more about Mechanism Design: Intuition
Famous quotes containing the words mechanism and/or design:
“The law isn’t justice. It’s a very imperfect mechanism. If you press exactly the right buttons and are also lucky, justice may show up in the answer. A mechanism is all the law was ever intended to be.”
—Raymond Chandler (1888–1959)
“With wonderful art he grinds into paint for his picture all his moods and experiences, so that all his forces may be brought to the encounter. Apparently writing without a particular design or responsibility, setting down his soliloquies from time to time, taking advantage of all his humors, when at length the hour comes to declare himself, he puts down in plain English, without quotation marks, what he, Thomas Carlyle, is ready to defend in the face of the world.”
—Henry David Thoreau (1817–1862)