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Consistent collusion-proofness and correlation in exchange economies

  • Giraud, Gael
  • Rochon, Celine

We present a feasible strategic market mechanism with finitely many agents whose Nash, semi-strong Nash and coalition-proof Nash equilibria fully implement the Walrasian equilibria. We define a strategic equilibrium concept, called correlated semi-strong equilibrium, and show that the Walrasian equilibria can be implemented by the these equilibria, and also by the coalition-proof correlated equilibria of our mechanism. We show that these two concepts, suitably modified with transfers, fully implement the Pareto optimal allocations. We extend to semi-strong correlated equilibria Aumann's Bayesian interpretation of correlated equilibria.

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Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 38 (2002)
Issue (Month): 4 (December)
Pages: 441-463

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Handle: RePEc:eee:mateco:v:38:y:2002:i:4:p:441-463
Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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  18. Azariadis, Costas, 1981. "Self-fulfilling prophecies," Journal of Economic Theory, Elsevier, vol. 25(3), pages 380-396, December.
  19. GIRAUD, Gaël & ROCHON, Céline, 2001. "Generic efficiency and collusion-proofness in exchange economies," CORE Discussion Papers 2001019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  20. Dubey, P. & Rogawski, J. D., 1990. "Inefficiency of smooth market mechanisms," Journal of Mathematical Economics, Elsevier, vol. 19(3), pages 285-304.
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