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Gerard-Varet} [Cah. Cent. \u00c9tud. Rech. Op\u00e9r. 18, 167--172 (1976; Zbl 0324.90108)] in the level-\\(k\\) model, where agents maximize their payoffs against a non-equilibrium belief about other agents' strategies by performing at most \\(k\\) iterations of best reply. It is obtained that, if level-\\(0\\) agents truthfully reveal their preference types to the principal, then the AVG mechanism leads to efficient implementation, while, if level-\\(0\\) agents report distorted preferences, then the AVG mechanism does not induce truth-telling and produces a suboptimal allocation, and the deviation from the optimal strategy tends to zero as \\(k\\) tends to infinity. The author also shows that, by introducing a betting round -- where agents guess the reports of each other -- and an incentive transfer rewarding truth-telling, the AVG mechanism can be altered to produce close-to-efficient allocation even if level-\\(0\\) agents report distorted preferences and the principal does not know the deviation of reported preferences from the true preference distribution.  The level-\\(k\\) model is a game of incomplete information where for each agent \\(i \\in I\\), with type \\(\\theta_{i} \\in \\Theta\\), the payoffs are given by \\(u_{i}(s,\\theta_{i})\\) where \\(s=(s_{1},s_{2},\\dots,s_{n})\\) is a strategy profile, i.e., \\(s_{j}\\) associates actions to types. The types of agents have a commonly known distribution \\(F\\). Agents engage in iterations of best reply to maximize their payoff. Their utility is of the form \\(v_{i} (x,\\theta_{i})+T_{i}\\) where \\(x\\) is the allocation and \\(T_{i}\\) is the monetary transfer to agent \\(i\\). The functions \\(v_{i}\\) are assumed to satisfy the Spence-Mirrlees condition.  The strategy \\(s^{(k)}_{i}(\\theta_{i})\\) is recursively defined to maximize the expected payoff against opponents making exactly \\(k-1\\) iterations of best reply. Level-\\(0\\) agents are nonstrategic, modeled by assuming that either they reveal their type truthfully, or reports a type randomly according to a common -- known or unknown -- distribution \\(\\Phi\\).  The author illustrates some of the main results of the paper by the following example. Suppose that there are \\(n\\) agents, and \\(v_{i} (x,\\theta_{i}) = \\theta_{i}x-x^{2}/2\\). Then the efficient allocation is \\(x = \\sum_{i}\\theta_{i}/n\\), while the optimal level-\\(k\\) strategy is  \\[ s^{(k)}_{i}(\\theta_{i}) = \\theta_{i}+\\Delta\\left(-\\frac{n-1}{n}\\right)^{k+1} \\]  where \\(\\Delta = \\int \\theta d F(\\theta) - \\int s d \\Phi(s)\\) is the difference between the average type and the average random move of a level-\\(0\\) agent.  The author obtains that, if in addition to \\(F\\), both \\(\\Phi\\) and \\(k\\) are known by the principal, then by changing the incentive transfer to level-\\(1\\) agents, the principal can implement efficient allocation. If either \\(k\\) or \\(\\Phi\\) is unknown by the principal, then a betting round can be added to the mechanism -- in which the agents guess the level of the other agents if \\(k\\) is unknown, or report \\(\\Phi\\) if \\(\\Phi\\) is unknown -- and the incentive transfer can be customized to induce 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