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Asymptotically Strategy-Proof Walrasian Exchange

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  • Jose M. Cordoba
  • Peter J. Hammond

Abstract

February 1998 In smooth exchange economies with a continuum of agents, any Walrasian mechanism is Pareto efficient, individually rational, anonymous, and strategy-proof. Barberà and Jackson's (1995) results imply that no such efficient mechanism is the limit of resource-balanced, individually rational, anonymous and non-bossy strategy-proof allocation mechanisms for an expanding sequence of finite economies. For a broad class of smooth random exchange economies, relaxing anonymity and non-bossiness admits mechanisms which, as the economy becomes infinitely large, are asymptotically Walrasian for all except one ``balancing'' agent, while being manipulable with generically vanishing probability. Also considered are some extensions to non-Walrasian mechanisms. JEL classification: D82, D61, D5 Keywords: strategy-proofness, mechanism design, random economies, Walrasian equilibrium.

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Bibliographic Info

Paper provided by Stanford University, Department of Economics in its series Working Papers with number 98005.

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Date of creation: Feb 1998
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Handle: RePEc:wop:stanec:98005

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Keywords: strategy-proofness; mechanism design; random economies; Walrasian equilibrium;

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  1. Kovalenkov, Alexander, 2002. "Simple Strategy-Proof Approximately Walrasian Mechanisms," Journal of Economic Theory, Elsevier, vol. 103(2), pages 475-487, April.
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Citations

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Cited by:
  1. Salvador Barberà, 2010. "Strategy-proof social choice," UFAE and IAE Working Papers 828.10, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  2. Ehlers,L. & Peters,Hans & Storcken,Ton, 2000. "Threshold Strategy-Proofness: On Manipulability in Large Voting Problems," Research Memorandum 038, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  3. Matthew Jackson & Ilan Kremer, 2007. "Envy-freeness and implementation in large economies," Review of Economic Design, Springer, vol. 11(3), pages 185-198, November.
  4. R. J. Gary-Bobo & T. Jaaidane, 1996. "Polling mechanisms and the demand revelation problem," THEMA Working Papers 96-31, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  5. Schummer, James, 2004. "Almost-dominant strategy implementation: exchange economies," Games and Economic Behavior, Elsevier, vol. 48(1), pages 154-170, July.
  6. Kovalenkov, Alexander, 2002. "Simple Strategy-Proof Approximately Walrasian Mechanisms," Journal of Economic Theory, Elsevier, vol. 103(2), pages 475-487, April.
  7. James Schummer, 1999. "Almost-dominant Strategy Implementation," Discussion Papers 1278, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Jackson, Matthew O. & Kremer, Ilan, 2004. "The relationship between the allocation of goods and a seller's revenue," Journal of Mathematical Economics, Elsevier, vol. 40(3-4), pages 371-392, June.

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