Implementation theory assumes that participants' choices are rational, in the sense of being consistent with the maximization of a context-independent preference. The paper investigates implementation under complete information when individuals' choices need not be rational. (JEL D11, D60, D83, R31)

Consumers purchase multiple types of goods but may be able to examine only a limited number of markets for the best price. We propose a simple model that captures these features, conveying new insights. A firm’s price can deflect or draw attention to its market, and consequently, limited attention introduces a new dimension of cross-market competition. We characterize the equilibrium and show that having partially attentive consumers improves consumer welfare. With less attention, consumers are more likely to miss the best offers; but enhanced cross-market competition decreases average price paid, as leading firms try to stay under the consumers’ radar.

A key feature of arbitration is the possibility for conflicting parties to participate in the selection of the arbitrator, the individual who will rule the case. We analyze this problem of the selection of arbitrators from the perspective of implementation theory. In particular, theoretical analyses document problems with veto-rank—a simultaneous procedure commonly used in practice—and develop a new sequential procedure—shortlisting—with better properties. Experimental results are consistent with the theoretical predictions, highlighting both the disadvantages associated with the veto-rank procedure and the advantages associated with the shortlisting procedure. (JEL D71, D72)