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Endowments, Exclusion, and Exchange

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  • Ivan Balbuzanov
  • Maciej H. Kotowski

Abstract

We propose a new solution for discrete exchange economies and resource‐allocation problems, the exclusion core. The exclusion core rests upon a foundational idea in the legal understanding of property, the right to exclude others. By reinterpreting endowments as a distribution of exclusion rights, rather than as bundles of goods, our analysis extends to economies with qualified property rights, joint ownership, and social hierarchies. The exclusion core is characterized by a generalized top trading cycle algorithm in a large class of economies, including those featuring private, public, and mixed ownership. It is neither weaker nor stronger than the strong core.

Suggested Citation

  • Ivan Balbuzanov & Maciej H. Kotowski, 2019. "Endowments, Exclusion, and Exchange," Econometrica, Econometric Society, vol. 87(5), pages 1663-1692, September.
  • Handle: RePEc:wly:emetrp:v:87:y:2019:i:5:p:1663-1692
    DOI: 10.3982/ECTA15676
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    Cited by:

    1. Jun Zhang, 2020. "Cores in discrete exchange economies with complex endowments," Papers 2005.09351, arXiv.org, revised May 2021.
    2. Federico Echenique & Antonio Miralles & Jun Zhang, 2019. "Fairness and efficiency for probabilistic allocations with participation constraints," Papers 1908.04336, arXiv.org, revised May 2020.
    3. Maria Gabriella Graziano & Claudia Meo & Nicholas C. Yannelis, 2020. "Shapley and Scarf housing markets with consumption externalities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1481-1514, September.
    4. Echenique, Federico & Miralles, Antonio & Zhang, Jun, 2021. "Fairness and efficiency for allocations with participation constraints," Journal of Economic Theory, Elsevier, vol. 195(C).

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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