Mechanism design chooses allocation and payment rules while accounting for how agents' information and incentives affect their reports. Social choice theory studies collective choice from preferences, while auction design also uses monetary transfers.
Mechanism design is a field in economic theory and game theory that focuses on creating systems or institutions (mechanisms) that lead to desired outcomes or behaviors among self-interested agents. It is often described as "reverse game theory," as it starts with the desired outcomes and then works backward to devise rules or mechanisms that will result in those outcomes when individuals act in their own interests.
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