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Efficient Strategy-Proof Exchange and Minimum Consumption Guarantees

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  • Shigehiro Serizawa

    ()
    (Faculty of Economics, Tohoku University)

  • John A. Weymark

    ()
    (Department of Economics, Vanderbilt University)

Abstract

For exchange economies with classical economic preferences, it is shown that any strategy-proof social choice function that selects Pareto optimal outcomes cannot guarantee everyone a consumption bundle bounded away from the origin. This result demonstrates that there is a fundamental conflict between efficiency and distributional goals in exchange economies if the social choice rule is required to be strategy-proof.

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File URL: http://www.accessecon.com/pubs/VUECON/vu02-w16R.pdf
File Function: Revised version, 2002
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Bibliographic Info

Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0216.

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Date of creation: Jun 2002
Date of revision: Aug 2002
Handle: RePEc:van:wpaper:0216

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Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

Related research

Keywords: Social choice; strategy-proofness; exchange economics;

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References

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  1. Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 23-38, January.
  2. Hurwicz, Leonid & Walker, Mark, 1990. "On the Generic Nonoptimality of Dominant-Strategy Allocation Mechanisms: A General Theorem That Includes Pure Exchange Economies," Econometrica, Econometric Society, vol. 58(3), pages 683-704, May.
  3. Moulin, Herve & Thomson, William, 1988. "Can everyone benefit from growth? : Two difficulties," Journal of Mathematical Economics, Elsevier, vol. 17(4), pages 339-345, September.
  4. Salvador Barbera & Matthew O. Jackson, 1993. "Strategy-Proof Exchange," Discussion Papers 1021, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Lin Zhou, 1990. "Inefficiency of Strategy-Proof Allocation Mechanisms in Pure Exchange Economies," Cowles Foundation Discussion Papers 954, Cowles Foundation for Research in Economics, Yale University.
  6. Roberts, Donald John & Postlewaite, Andrew, 1976. "The Incentives for Price-Taking Behavior in Large Exchange Economies," Econometrica, Econometric Society, vol. 44(1), pages 115-27, January.
  7. Mark A. Satterthwaite, 2001. "Strategy-proofness and markets," Social Choice and Welfare, Springer, vol. 18(1), pages 37-58.
  8. Serizawa, Shigehiro, 2002. "Inefficiency of Strategy-Proof Rules for Pure Exchange Economies," Journal of Economic Theory, Elsevier, vol. 106(2), pages 219-241, October.
  9. Satterthwaite, Mark A & Sonnenschein, Hugo, 1981. "Strategy-Proof Allocation Mechanisms at Differentiable Points," Review of Economic Studies, Wiley Blackwell, vol. 48(4), pages 587-97, October.
  10. Kannai, Yakar, 1970. "Continuity Properties of the Core of a Market," Econometrica, Econometric Society, vol. 38(6), pages 791-815, November.
  11. Muller, Eitan & Satterthwaite, Mark A., 1977. "The equivalence of strong positive association and strategy-proofness," Journal of Economic Theory, Elsevier, vol. 14(2), pages 412-418, April.
  12. Dasgupta, Partha S & Hammond, Peter J & Maskin, Eric S, 1979. "The Implementation of Social Choice Rules: Some General Results on Incentive Compatibility," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 185-216, April.
  13. James Schummer, 1996. "Strategy-proofness versus efficiency on restricted domains of exchange economies," Social Choice and Welfare, Springer, vol. 14(1), pages 47-56.
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Citations

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Cited by:
  1. Ju, Biung-Ghi, 2004. "Continuous selections from the Pareto correspondence and non-manipulability in exchange economies," Journal of Mathematical Economics, Elsevier, vol. 40(5), pages 573-592, August.
  2. Dutta, Bhaskar & Sen, Arunava, 2012. "Nash implementation with partially honest individuals," Games and Economic Behavior, Elsevier, vol. 74(1), pages 154-169.
  3. Walter Bossert & John A. Weymark, 2006. "Social Choice: Recent Developments," Vanderbilt University Department of Economics Working Papers 0603, Vanderbilt University Department of Economics.
  4. Peck, James & Spear, Stephen E., 2003. "Introduction to a Festschrift for Karl Shell," Journal of Economic Theory, Elsevier, vol. 109(2), pages 153-155, April.
  5. Ando, Kazutoshi & Kato, Miki & Ohseto, Shinji, 2008. "Strategy-proof and symmetric allocation of an indivisible good," Mathematical Social Sciences, Elsevier, vol. 55(1), pages 14-23, January.
  6. Biung-Ghi Ju, 2003. "Strategy-Proof Risk Sharing," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 200305, University of Kansas, Department of Economics, revised Apr 2003.
  7. Shigehiro Serizawa, 2005. "Pairwise Strategy-Proofness and Self-Enforcing Manipulation," ISER Discussion Paper 0629, Institute of Social and Economic Research, Osaka University.
  8. Schummer, James, 2004. "Almost-dominant strategy implementation: exchange economies," Games and Economic Behavior, Elsevier, vol. 48(1), pages 154-170, July.
  9. MacKenzie, Ian A. & Ohndorf, Markus, 2013. "Restricted Coasean bargaining," Journal of Public Economics, Elsevier, vol. 97(C), pages 296-307.
  10. Luis C. Corchon, 2007. "The theory of implementation : what did we learn?," Economics Working Papers we081207, Universidad Carlos III, Departamento de Economía.
  11. Sasaki, Hiroo, 2003. "Limitation of Efficiency: Strategy-Proofness and Single-Peaked Preferences with Many Commodities," Working Papers 2003-01, Rice University, Department of Economics.
  12. Ju, Biung-Ghi, 2005. "Strategy-proof risk sharing," Games and Economic Behavior, Elsevier, vol. 50(2), pages 225-254, February.
  13. Salvador Barberà, 2010. "Strategy-proof social choice," Working Papers 420, Barcelona Graduate School of Economics.
  14. Wonki Jo Cho, 2013. "Impossibility Results for Parametrized Notions of Efficiency and Strategyproofness in Exchange Economies," The School of Economics Discussion Paper Series 1314, Economics, The University of Manchester.
  15. Hidekazu Anno & Hiroo Sasaki, 2013. "Second-best efficiency of allocation rules: strategy-proofness and single-peaked preferences with multiple commodities," Economic Theory, Springer, vol. 54(3), pages 693-716, November.
  16. Kazuhiko Hashimoto, 2008. "Strategy-proofness versus efficiency on the Cobb-Douglas domain of exchange economies," Social Choice and Welfare, Springer, vol. 31(3), pages 457-473, October.
  17. Momi, Takeshi, 2013. "Note on social choice allocation in exchange economies with many agents," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1237-1254.
  18. Jin Li & Jingyi Xue, 2013. "Egalitarian division under Leontief Preferences," Economic Theory, Springer, vol. 54(3), pages 597-622, November.
  19. Luis Corchón & José Rueda-Llano, 2008. "Differentiable strategy-proof mechanisms for private and public goods in domains that are not necessarily large or quasi-linear," Review of Economic Design, Springer, vol. 12(4), pages 279-291, December.

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