Contingent commodities and implementation
In this note we consider the problem whether contingent commodity allocations can be used when the states are not directly contractible. In such a setting a contingent commodity allocation takes the form of a social choice function, and the question is whether this function is implementable (in the sense of full implementation). Using only very mild assumptions on the rule for selecting contingent commodity allocations, we derive a strong negative result which also proves to be robust with respect to different solution concepts employed for implementation. These findings have interesting implications for the interpretation of Arrow-Debreu economies.
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- Matsushima, Hitoshi, 1988. "A new approach to the implementation problem," Journal of Economic Theory, Elsevier, vol. 45(1), pages 128-144, June.
- B. Douglas Bernheim & Michael D. Whinston, 1997.
"Incomplete Contracts and Strategic Ambiguity,"
Harvard Institute of Economic Research Working Papers
1787, Harvard - Institute of Economic Research.
- Palfrey, Thomas R & Srivastava, Sanjay, 1989. "Implementation with Incomplete Information in Exchange Economies," Econometrica, Econometric Society, vol. 57(1), pages 115-34, January.
- Maskin, Eric, 1999.
"Nash Equilibrium and Welfare Optimality,"
Review of Economic Studies,
Wiley Blackwell, vol. 66(1), pages 23-38, January.
- Eric Maskin, 1998. "Nash Equilibrium and Welfare Optimality," Harvard Institute of Economic Research Working Papers 1829, Harvard - Institute of Economic Research.
- Abreu, Dilip & Sen, Arunava, 1991. "Virtual Implementation in Nash Equilibrium," Econometrica, Econometric Society, vol. 59(4), pages 997-1021, July.
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