Interactive implementation

We suppose the principal not only designs a mechanism, but can participate as a player. The result is a Bayesian model where one player, the principal , has no information; and the remaining players have complete information. We find a necessary and sufficient condition for implementation. In contras t to the standard model, in the exchange economy many cardinal rules, such as the utilitarian social welfare function, satisfy this condition and henc e can be implemented. Compared to the literature on Bayesian implementation , our mechanisms are rather simple. The idea is that the agents announce a state of the world, while the principal announces a strategy profile for th e agents. Journal of Economic Literature Classification Numbers: C72, D71, D78. (C) 1999 Academic Press.