Rights and Decentralized Computation
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. Copyright Blackwell Publishing Ltd 2004.
Volume (Year): 55 (2004)
Issue (Month): 2-3 (05)
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