This paper incorporates social psychology into implementation theory, where an
uninformed principal manipulates a dynamic decision-making process without
employing any tailored contractual device. We demonstrate the principal's mind-control
method through which he can effectively utilize social psychology tactics to incentivize
informed agents to announce their information in keeping with his wishes. We show
that with incentive compatibility, the principal can implement any alternative that he
wishes as the unique Nash equilibrium outcome, even if the psychological cost of each
agent from disobeying the principal's wishes is small as compared to his total material
benefits. |