CIRJE-F-128. Matsushima, Hitoshi, "Stable Implementation", August 2001.

This paper investigates the implementation problem of a social choice function in the complete information environments. We investigate a partial revelation mechanism, in which, each player announces only opinions about her own and two neighbors' utility indices. We require that for every preference profile, the truthful message profile virtually enforce the allocation suggested by the social choice function. We hypothesize that each player may announce any best-reply but disequilibrium message even if the others play a Nash equilibrium. Based on this hypothesis, we require that the truthful message profile be stable in that it is reachable from every message profile, but no other message profile is reachable from it. The main result of the paper is permissive. With a minor restriction, every efficient and inefficient social choice function is virtually implementable in terms of stability. In contrast to the previous works, the mechanism constructed in the paper is so simple that there exist no slack messages that each player never announces as long as the others announce the stable message profile. The size of the set of message profiles is finite and is constant with respect to the number of players and the upper bound of fines.