Appendix: An incentive-compatible revelation mechanism is
A) self-enforcing
B) always multi-period
C) too complicated to influence decisions
D) prevalent in vertically integrated businesses
E) not adopted by franchise businesses

Question

Quizplus · Accepted Answer

An incentive-compatible revelation mechanism is self-enforcing, meaning it is designed to encourage truthful reporting by aligning the incentives of reporting truthfully with the payoffs for doing so. It is a mechanism commonly used in game theory and mechanism design. The other choices are either irrelevant or incorrect.

Appendix: an Incentive-Compatible Revelation Mechanism Is