Mário Rui Páscoa () (Faculdade de Economia, Universidade Nova de Lisboa, Travessa Estêv ao Pinto . P-1099-032 Lisboa, PORTUGAL) Carlos Hervés-Beloso (Departamento de Matemáticas, Universidad de Vigo, Aptdo 874, E-36200 Vigo, SPAIN) Emma Moreno-García () (Faculdade de Economia, Universidade Nova de Lisboa, Travessa Estêv ao Pinto . P-1099-032 Lisboa, PORTUGAL)
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In this paper, we introduce a perfect competition test which checks the incentives of arbitrarily small coalitions to behave strategically in endowments and preferences. We apply this coalitional incentive compatibility test to atomless economies with a continuum of differentiated commodities. We show that, under thickness conditions, economies with a finite number of types and economies whose set of agents' preferences is compact, pass this perfect competition test. Limiting results for replica economies are also presented.
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Article provided by Springer in its journal Economic Theory.