Editing Mechanism design (section)

==Description==

One person, called the "principal", would like to condition his behavior on information privately known to the players of a [[Game form|game]]. For example, the principal would like to know the true quality of a used car a salesman is pitching. He cannot learn anything simply by asking the salesman, because it is in the salesman's interest to distort the truth. However, in mechanism design, the principal does have one advantage: He may design a game whose rules influence others to act the way he would like.

Without mechanism design theory, the principal's problem would be difficult to solve. He would have to consider all the possible games and choose the one that best influences other players' tactics. In addition, the principal would have to draw conclusions from agents who may lie to him. Thanks to the [[revelation principle]], the principal only needs to consider games in which agents truthfully report their private information.