@booklet {feldman-iwabas2005,
	title = {Implementation with a Bounded Action Space},
	howpublished = {Discussion Papers},
	year = {2005},
	month = {12},
	abstract = {While traditional mechanism design typically assumes isomorphism between the agents{\textquoteright} type- and action spaces, in many situations the agents face strict restrictions on their action space due to, e.g., technical, behavioral or regulatory reasons. We devise a general framework for the study of mechanism design in single-parameter environments with restricted action spaces. Our contribution is threefold. First, we characterize sufficient conditions under which the information-theoretically optimal social-choice rule can be implemented in dominant strategies, and prove that any multilinear social-choice rule is dominant-strategy implementable with no additional cost. Second, we identify necessary conditions for the optimality of action-bounded mechanisms, and fully characterize the optimal mechanisms and strategies in games with two players and two alternatives. Finally, we prove that for any multilinear social-choice rule, the optimal mechanism with k actions incurs an expected loss of O(1/k2) compared to the optimal mechanisms with unrestricted action spaces. Our results apply to various economic and computational settings, and we demonstrate their applicability to signaling games, public-good models and routing in networks.},
	url = {/files/dp412.pdf},
	author = {Feldman, Liad Blumrosen and Michal}
}
