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Note on social choice allocation in exchange economies with many agents

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  • Momi, Takeshi

Abstract

We show that in pure exchange economies there exists no Pareto-efficient and strategy-proof allocation mechanism that ensures positive consumption for all agents. We also show that a Pareto-efficient, strategy-proof, and non-bossy allocation mechanism is dictatorial. We further show that in three-agent economies, the allocation given by a Pareto-efficient, strategy-proof, and non-dictatorial mechanism depends only on one agentʼs preference who is always allocated zero consumption. That is, in three-agent economies, Zhouʼs (1991) [14] conjecture is true and any Pareto-efficient and strategy-proof mechanism is of Satterthwaite and Sonnenscheinʼs (1981) [10] type.

Suggested Citation

  • Momi, Takeshi, 2013. "Note on social choice allocation in exchange economies with many agents," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1237-1254.
  • Handle: RePEc:eee:jetheo:v:148:y:2013:i:3:p:1237-1254
    DOI: 10.1016/j.jet.2012.10.008
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    References listed on IDEAS

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    1. Takeshi Momi, 2013. "Note on social choice allocation in exchange economies with Cobb–Douglas preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 787-792, March.
    2. Miki Kato & Shinji Ohseto, 2002. "Toward general impossibility theorems in pure exchange economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 19(3), pages 659-664.
    3. Serizawa, Shigehiro & Weymark, John A., 2003. "Efficient strategy-proof exchange and minimum consumption guarantees," Journal of Economic Theory, Elsevier, vol. 109(2), pages 246-263, April.
    4. Mark A. Satterthwaite & Hugo Sonnenschein, 1981. "Strategy-Proof Allocation Mechanisms at Differentiable Points," Review of Economic Studies, Oxford University Press, vol. 48(4), pages 587-597.
    5. Kannai, Yakar, 1970. "Continuity Properties of the Core of a Market," Econometrica, Econometric Society, vol. 38(6), pages 791-815, November.
    6. Kazuhiko Hashimoto, 2008. "Strategy-proofness versus efficiency on the Cobb-Douglas domain of exchange economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 31(3), pages 457-473, October.
    7. Biung-Ghi Ju, 2003. "Strategy-proofness versus efficiency in exchange economies: General domain properties and applications," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(1), pages 73-93, August.
    8. Serizawa, Shigehiro, 2002. "Inefficiency of Strategy-Proof Rules for Pure Exchange Economies," Journal of Economic Theory, Elsevier, vol. 106(2), pages 219-241, October.
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    Citations

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    Cited by:

    1. Mridu Goswami, 2015. "Non fixed-price trading rules in single-crossing classical exchange economies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(2), pages 389-422, February.
    2. Goswami, Mridu Prabal & Sen, Arunava & Mitra, Manipushpak, 2014. "Strategy-proofness and Pareto-efficiency in quasi-linear exchange economies," Theoretical Economics, Econometric Society, vol. 9(2), May.
    3. Momi, Takeshi, 2017. "Efficient and strategy-proof allocation mechanisms in economies with many goods," Theoretical Economics, Econometric Society, vol. 12(3), September.
    4. Mridu Prabal Goswami, 2013. "Non Fixed-Price Trading Rules In Single-Crossing Classical Exchange Economies," Working Papers 1311, Ben-Gurion University of the Negev, Department of Economics.
    5. Takeshi Momi, 2013. "Note on social choice allocation in exchange economies with Cobb–Douglas preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 787-792, March.
    6. Mridu Prabal Goswami, 2014. "Equal Treatment of Equals in Classical Quasilinear Exchange Economies," Working Papers 1403, Ben-Gurion University of the Negev, Department of Economics.
    7. Jin Li & Jingyi Xue, 2013. "Egalitarian division under Leontief Preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 597-622, November.

    More about this item

    Keywords

    Social choice; Strategy-proofness; Pareto-efficiency; Exchange economy;

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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