Editing Market Mechanism Design (section)

== <span style="color: #FFFFFF;">Analyzing</span> ==
{| class="wikitable"
|+ Problems and Design Solutions
! Problem !! Economic Cause !! Design Solution
|-
| Used Car Scams || Adverse Selection || Warranties / Certifications
|-
| Insurance Fraud || Moral Hazard || Deductibles / Copays
|-
| Overfishing || Tragedy of the Commons || Individual Transferable Quotas (ITQs)
|-
| Fake Bidding || Strategy Gaming || Second-Price Auctions
|}

'''The revelation principle''': This powerful mathematical theorem states that for any goal you want to achieve, there is a "direct" mechanism where everyone just tells the truth. If your system is being "gamed," it's a design failure, not a human failure.
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