incentive compatibility
/ɪnˈsentɪv kəmˌpætɪˈbɪlɪti/
a system where honest behavior is in each participant's interest
incentive compatibility in a sentence
“The Vickrey auction is incentive compatible.”
Origin of incentive compatibility
From incentive (Latin incendere to kindle) + compatible
Related Words
social dilemma
a situation where individual rationality leads to collective irrationality
tragedy of the commons
depletion of shared resources due to individual self-interest
free rider problem
the tendency to benefit from collective goods without contributing
coordination problem
difficulty in aligning actions when mutual benefit requires agreement
public good
a good that is non-excludable and non-rivalrous
externality
a cost or benefit affecting parties not involved in a transaction