“In this public project case, or in the auction case. We don’t know people’s values, so what we’d like to do is we’d like to create a mechanism where people truthfully reveal their values, and where we get outcomes that are desired outcomes. So in the case of an auction, we sell it to the person who values it the most. And in the case of a public project, we undertake the public project if it’s worth doing. All right, so that’s mechanism design and it’s really interesting, it’s a way to use models to try and design institutions so they’re more efficient. Now one thing we saw now, and I wanna be very careful, is most mechanism design assumes people are rational, but we talk about auctions, some [inaudible] we saw that, if we don’t assume people rational, we maybe get slightly different implications of what we should do. ” – Transcript from Scott Page Coursera
Source:
Scott Page Model Thinking MOOC Course
