mechanism design
/ˈmɛkəˌnɪzəm dɪˈzaɪn/ · mech·a·nism de·sign
noun
- A subfield of economics and game theory that studies how to construct rules or institutions (mechanisms) so that participants, acting in their own self‑interest, achieve a desired collective outcome. The professor’s course on mechanism design taught students how to create auctions that elicit truthful bids.
- The process of designing a specific mechanism—such as an auction, voting system, or contract—so that it aligns individual incentives with a predetermined objective. Through careful mechanism design, the city implemented a congestion‑pricing scheme that reduced traffic during peak hours.
Synonyms
incentive engineeringimplementation theorygame‑theoretic designinstitutional designallocation designcontract designauction designsocial engineering (economic sense)
Antonyms
Did you know? In 2007, economists Leonid Hurwicz, Eric Maskin, and Roger Myerson received the Nobel Memorial Prize in Economic Sciences for their foundational work in mechanism design.