Direct mechanism
A set of rules in which each participant simply reports their private information and the rules then fix the outcome and any payments.
Often misread asTaking a direct mechanism to be one in which people report honestly, so directness and incentive compatibility are treated as the same property.
How to see it
Direct is about the message, not about honesty
A direct mechanism strips the interaction to one step: everybody sends in a statement about their own private information, and the rules map those statements straight to an outcome and any payments. No rounds, no offers, no haggling.
The checkDirect is a fact about the message space, that each report is a claim about your own type. Whether the claim is true is incentive compatibility, and plenty of direct mechanisms are not incentive compatible.
Try itA first price sealed bid auction asks each bidder for a number standing for what the object is worth to them. Say whether it is direct, then say whether bidders state their true value. The answers are yes and no, and that pair is the whole distinction.
Know these first
Leads on to
Easily confused with
Sources
- Myerson, R. B. (1981). Mathematics of Operations Research 6(1), 58-73.
- Myerson, R. (1991). Harvard University Press.
- Mas-Colell, A., Whinston, M. & Green, J. (1995). Oxford University Press.