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Non-Walrasian decentralization of the core

  • Koutsougeras, Leonidas C.
  • Ziros, Nicholas
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    We show that in large finite economies, core allocations can be approximately decentralized as Nash (rather than Walras) equilibrium. We argue that this exercise is an essential complement to asymptotic core equivalence results, because it implies that in some approximate sense individual attempts to manipulate the decentralizing prices cannot be beneficial, which fits precisely the interpretation of asymptotic core convergence, namely the emergence of price taking.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0304406811000735
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    Article provided by Elsevier in its journal Journal of Mathematical Economics.

    Volume (Year): 47 (2011)
    Issue (Month): 4-5 ()
    Pages: 610-616

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    Handle: RePEc:eee:mateco:v:47:y:2011:i:4:p:610-616
    Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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    1. Amir, Rabah & Sahi, Siddharta & Shubik, Martin & Yao, Shuntian, 1990. "A strategic market game with complete markets," Journal of Economic Theory, Elsevier, vol. 51(1), pages 126-143, June.
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    3. Anderson, Robert M., 1992. "The core in perfectly competitive economies," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 14, pages 413-457 Elsevier.
    4. Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-68, October.
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    6. Khan, M Ali, 1974. "Some Equivalence Theorems," Review of Economic Studies, Wiley Blackwell, vol. 41(4), pages 549-65, October.
    7. Dubey, Pradeep & Shubik, Martin, 1978. "A theory of money and financial institutions. 28. The non-cooperative equilibria of a closed trading economy with market supply and bidding strategies," Journal of Economic Theory, Elsevier, vol. 17(1), pages 1-20, February.
    8. Radner, Roy, 1980. "Collusive behavior in noncooperative epsilon-equilibria of oligopolies with long but finite lives," Journal of Economic Theory, Elsevier, vol. 22(2), pages 136-154, April.
    9. Postlewaite, A & Schmeidler, David, 1978. "Approximate Efficiency of Non-Walrasian Nash Equilibria," Econometrica, Econometric Society, vol. 46(1), pages 127-35, January.
    10. Grodal, Birgit, 1975. "The rate of convergence of the core for a purely competitive sequence of economies," Journal of Mathematical Economics, Elsevier, vol. 2(2), pages 171-186.
    11. Anderson, Robert M, 1978. "An Elementary Core Equivalence Theorem," Econometrica, Econometric Society, vol. 46(6), pages 1483-87, November.
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