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The Gibbard–Satterthwaite theorem is a theorem in social choice theory. It was first conjectured by the philosopher Michael Dummett and the mathematician Robin Farquharson in 1961 [ 1 ] and then proved independently by the philosopher Allan Gibbard in 1973 [ 2 ] and economist Mark Satterthwaite in 1975. [ 3 ]
Typical examples of DSIC mechanisms are second-price auctions and a simple majority vote between two choices. Typical examples of non-DSIC mechanisms are ranked voting with three or more alternatives (by the Gibbard–Satterthwaite theorem) or first-price auctions.
The Gibbard–Satterthwaite theorem implies that the only rule satisfying non-imposition (every alternative can be chosen) and strategyproofness when there are more than two candidates is the dictatorship mechanism. That is, a voter may be able to cast a ballot that misrepresents their preferences to obtain a result that is more favorable to ...
A corollary of this theorem is the Gibbard–Satterthwaite theorem about voting rules. The key difference between the two theorems is that Gibbard–Satterthwaite applies only to ranked voting. Because of its broader scope, Gibbard's theorem makes no claim about whether voters need to reverse their ranking of candidates, only that their optimal ...
The revelation principle shows that, while Gibbard's theorem proves it is impossible to design a system that will always be fully invulnerable to strategy (if we do not know how players will behave), it is possible to design a system that encourages honesty given a solution concept (if the corresponding equilibrium is unique). [3] [4]
Gibbard's theorem shows that any strategyproof game form (i.e. one with a dominant strategy) with more than two outcomes is dictatorial. The Gibbard–Satterthwaite theorem is a special case showing that no deterministic voting system can be fully invulnerable to strategic voting in all circumstances, regardless of how others vote.
Restricted preference domains, such as single-peaked or single-crossing preferences, are an important area of study in social choice theory, since preferences from these domains avoid the Condorcet paradox and thus can circumvent impossibility results like Arrow's theorem and the Gibbard-Satterthwaite theorem.
Leonid Hurwicz explains that "in a design problem, the goal function is the main given, while the mechanism is the unknown. Therefore, the design problem is the inverse of traditional economic theory, which is typically devoted to the analysis of the performance of a given mechanism." [3]