Abstract
We suppose the principal not only designs a mechanism, but can participate as a player. The result is a Bayesian model where one player, the principal, has no information, and the remaining players have complete information. We find a necessary and sufficient condition for implementation. In contrast to the standard model, in the exchange economy manycardinalrules, such as the utilitarian social welfare function, satisfy this condition and hence can be implemented. Compared to the literature on Bayesian implementation, our mechanisms are rather simple. The idea is that the agents announce a state of the world, while the principal announces a strategy profile for the agents.Journal of Economic LiteratureClassification Numbers: C72, D71, D78.
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