Implementation in perfect equilibria

This paper considers implementation when the feasible outcomes are lotteries over a finite set of alternatives. The following weak condition is sufficient for implementation in trembling hand perfect equilibria (with three or more players): if all but one player agree on which alternative is the best, this alternative is (among those that are) chosen by the social choice rule, and if all but one player agree on which alternative is the worst, this alternative is not chosen. Many interesting social choice rules that are not Nash implementable satisfy this condition. On the other hand, there are social choice rules that are implementable in Nash equilibria but not in perfect equilibria.I am grateful to Luis Corchón, Eric Maskin, William Thomson, seminar participants at Harvard and Rochester, and two anonymous referees for helpful comments and suggestions. This research was supported by grants from the Royal Swedish Academy of Sciences and the Bank of Sweden Tercentenary Foundation.