AbstractWe formulate and study the requirement on an allocation rule that no agent should be able to benefit by augmenting his endowment through borrowing resources from the outside world (alternatively, by simply exaggerating it). We show that the Walrasian rule is not "borrowing-proof" even on standard domains. More seriously, no efficient selection from the endowments-lower-bound correspondence, or from the no-envy-in-trades correspondence, or from the egalitarian-equivalent-in-trades correspondence is borrowing-proof. These impossibilities hold even on the domain of economies with homothetic preferences.
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Bibliographic InfoPaper provided by University of Rochester - Center for Economic Research (RCER) in its series RCER Working Papers with number 545.
Length: 29 pages
Date of creation: Jan 2009
Date of revision:
Contact details of provider:
Postal: University of Rochester, Center for Economic Research, Department of Economics, Harkness 231 Rochester, New York 14627 U.S.A.
borrowing-proofness; Endowment lower bound; No-envy-in-trades; Egalitarian-equivalent-in-trades.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-31 (All new papers)
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