Abstract: The objective of a mechanism designer is to optimize the social welfare function based on environment parameter spaces; however, relevant information about environment parameters is scattered in the economy. While mechanism designers would like to collect as much relevant information as possible, their aim is to make full use of the gathered information to develop a social decision. Mechanism is usually discussed under the framework or realization and implementation. The essential difference between these two frameworks is that the latter uses strategic interactions. The realization of mechanism with right in land use was discussed under a two dimensional message spaces. A mechanism can be designed to implement dominant equilibrium which addresses both information efficiency and incentive compatibility. The results showed that there exists a information efficient mechanism which can realize the goal function of government with truth-telling constraint. If the agents have private information, their truth-telling strategies may not be Nash equilibrium, but it could be a dominant equilibrium implemented by a mechanism.

Key words: mechanism design, realization, dominant equilibrium, implementation, truth-telling