Direct Implementation with Minimally Honest Individuals

I consider a standard implementation problem under complete information when agents have a minimal degree of honesty. In particular, I assume that agents are white lie averse: they strictly prefer to tell the truth whenever lying has no effect on their material payoff. I show that if there are at least five agents who are all white lie averse and if I impose either of two refinements of Nash equilibrium, then a simple direct mechanism fully implements any social choice function.

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