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Rights and Decentralized Computation

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  • Håkan J. Holm

Abstract

This paper emphasizes that rights facilitate decentralized use of information and computation. A dynamically efficient adjustment process that solves a private information linear resource allocation problem by a sequential auction of production and trading rights is presented. It is shown that in equilibrium the sequential auction mimics the simplex algorithm in a decentralized way and thereby gives it an institutional economic interpretation, where the structure of rights imposes restrictions on the problem sequentially.

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  • Håkan J. Holm, 2004. "Rights and Decentralized Computation," Metroeconomica, Wiley Blackwell, vol. 55(2‐3), pages 290-317, May.
    • Handle: RePEc:bla:metroe:v:55:y:2004:i:2-3:p:290-317
    DOI: 10.1111/j.0026-1386.2004.00194.x
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    References listed on IDEAS

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