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Endowments, Exclusion, and Exchange

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  • Ivan Balbuzanov
  • Maciej H. Kotowski

Abstract

We propose a new solution for discrete exchange economies and resource‐allocation problems, the exclusion core. The exclusion core rests upon a foundational idea in the legal understanding of property, the right to exclude others. By reinterpreting endowments as a distribution of exclusion rights, rather than as bundles of goods, our analysis extends to economies with qualified property rights, joint ownership, and social hierarchies. The exclusion core is characterized by a generalized top trading cycle algorithm in a large class of economies, including those featuring private, public, and mixed ownership. It is neither weaker nor stronger than the strong core.

Suggested Citation

  • Ivan Balbuzanov & Maciej H. Kotowski, 2019. "Endowments, Exclusion, and Exchange," Econometrica, Econometric Society, vol. 87(5), pages 1663-1692, September.
    • Handle: RePEc:wly:emetrp:v:87:y:2019:i:5:p:1663-1692
    DOI: 10.3982/ECTA15676
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    Cited by:

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    2. Echenique, Federico & Miralles, Antonio & Zhang, Jun, 2021. "Fairness and efficiency for allocations with participation constraints," Journal of Economic Theory, Elsevier, vol. 195(C).
    3. Jun Zhang, 2020. "Cores in discrete exchange economies with complex endowments," Papers 2005.09351, arXiv.org, revised May 2021.
    4. Carlos Hervés-Beloso & Emma Moreno-García, 2022. "Revisiting the Coase theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(2), pages 421-438, April.
    5. Maria Gabriella Graziano & Claudia Meo & Nicholas C. Yannelis, 2020. "Shapley and Scarf housing markets with consumption externalities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1481-1514, September.
    6. Morimitsu Kurino & Tetsutaro Hatakeyama, 2022. "Inter-attribute equity in assignment problems: Leveling the playing field by priority design," Keio-IES Discussion Paper Series 2022-009, Institute for Economics Studies, Keio University.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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