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Asymptotically Strategy-Proof Walrasian Exchange

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Author Info
Jose M. Cordoba
Peter J. Hammond

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

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Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
D5 - Microeconomics - - General Equilibrium and Disequilibrium

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  4. Jackson, Matthew O. & Manelli, Alejandro M., 1997. "Approximately Competitive Equilibria in Large Finite Economies," Journal of Economic Theory, Elsevier, vol. 77(2), pages 354-376, December. [Downloadable!] (restricted)
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  6. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Blackwell Publishing, vol. 38(114), pages 175-208, April. [Downloadable!] (restricted)
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    • Salvador Barbera & Matthew O. Jackson, 1993. "Strategy-Proof Exchange," Discussion Papers 1021, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  11. Kovalenkov, Alexander, 2002. "Simple Strategy-Proof Approximately Walrasian Mechanisms," Journal of Economic Theory, Elsevier, vol. 103(2), pages 475-487, April. [Downloadable!] (restricted)
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  1. Matthew Jackson & Ilan Kremer, 2007. "Envy-freeness and implementation in large economies," Review of Economic Design, Springer, vol. 11(3), pages 185-198, November. [Downloadable!] (restricted)
    Other versions:
  2. Ehlers,L. & Peters,Hans & Storcken,Ton, 2000. "Threshold Strategy-Proofness: On Manipulability in Large Voting Problems," Research Memoranda 038, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
    Other versions:
  3. James Schummer, 1999. "Almost-dominant Strategy Implementation," Discussion Papers 1278, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  4. Jackson, Matthew O. & Kremer, Ilan, 2002. "On the Concentration of Allocations and Comparisons of Auctions in Large Economies," Working Papers 1146, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
    Other versions:
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