Universität Bonn

Department of Economics

Cyril Monnet - University of Berne

"Truth-telling in a fully decentralized system. An impossibility theorem and experimental evidence"


We show that truthful reporting about the realization of a publicly observed event cannot be implemented as a unique equilibrium in a completely decentralized environment. We conduct an experiment to confirm the difficulties of eliciting truthful reporting in the lab. Our work provides a theoretical underpinning of the need for oracles and the related “oracle problem.”

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