🤖 AI Summary
This study investigates how participants’ understanding of equilibrium strategies transfers across different mechanisms. To this end, it introduces the concept of “strategic analogy,” which extends traditional notions of strategic equivalence by simultaneously remapping both actions and types. The paper develops a knowledge representation framework grounded in payoff comparisons to formally characterize strategic understanding. Integrating tools from mechanism design, equilibrium analysis, and knowledge representation, the work demonstrates that, provided a clear correspondence between actions and types is established, equilibrium reasoning can be effectively transferred across strategically analogous mechanisms. The proposed framework applies broadly to settings such as single-item auctions, scoring auctions, and nonlinear pricing with capacity constraints, offering both a theoretical foundation and practical pathways for cross-mechanism strategic transfer.
📝 Abstract
This paper studies when strategic understanding acquired in one mechanism can be transferred to another. We introduce a framework in which agents' knowledge is represented as a set of payoff comparisons they can make, and use it to formalize what it means to understand that a strategy profile is an equilibrium. We first apply this framework to mechanisms that are strategically equivalent-that is, share the same game form up to relabeling of actions-and show that agents' understanding of equilibrium transfers across such mechanisms once the relevant action correspondences are explained to them. We then define strategic analogy, a weaker notion that allows not only actions but also types to be remapped, and show that understanding of equilibrium transfers across strategically analogous mechanisms once agents recognize how actions and types correspond. Applications include single-item auctions, scoring auctions, and nonlinear pricing with capacity constraints.