Balancing supply and demand under bilateral constraints
AbstractIn a moneyless market, a non storable, non transferable homogeneous commodity is reallocated between agents with single-peaked preferences. Agents are either suppliers or demanders. Transfers between a supplier and a demander are feasible only if they are linked, and the links form an arbitrary bipartite graph. Typically, supply is short in one segment of the market, while demand is short in another. Information about individual preferences is private, and so is information about feasible links: an agent may unilaterally close one of her links if it is in her interest to do so. Our egalitarian transfer solution rations only the long side in each market segment, equalizing the net transfers of rationed agents as much as permitted by the bilateral constraints. It elicits a truthful report of both preferences and links: removing a feasible link is never profitable to either one of its two agents. Together with efficiency, and a version of equal treatment of equals, these properties are characteristic.
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Bibliographic InfoArticle provided by Econometric Society in its journal Theoretical Economics.
Volume (Year): 7 (2012)
Issue (Month): 3 (September)
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Web page: http://econtheory.org
Bipartite graph; bilateral trade; strategy-proofness; equal treatment of equals; single-peaked preferences;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
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