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Sequential Pseudomarkets: Welfare Economics in Random Assignment Economies

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  • Antonio Miralles

Abstract

We study random assignment economies with expected-utility agents, each of them eventually obtaining a single object. Inspired on Hylland and Zeckhauser's (1979) Pseudomarket mechanism (PM) and on a serial dictatorship, we introduce the Sequential Pseudomarket (SP) where groups of agents are called turn by turn and participate in a pseudomarket for the remaining objects. To measure efficiency, we focus on the set of ex-ante Pareto-optimal (PO) random assignments and on the ex-ante weak core (CO). We find: 1) PM ⊂ PO but the converse is not always true (there is no Second Theorem of Welfare Economics), 2) PO ⊂ SP but the converse is not always true, 3) SP ⊂ CO

Suggested Citation

  • Antonio Miralles, 2015. "Sequential Pseudomarkets: Welfare Economics in Random Assignment Economies," Working Papers 699, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:699
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    References listed on IDEAS

    as
    1. Thompson, W. & Zhou, L., 1991. "Consistent Allocation Rules in Atomless Economies," RCER Working Papers 294, University of Rochester - Center for Economic Research (RCER).
    2. Yinghua He & Antonio Miralles & Jianye Yan, 2012. "Competitive Equilibrium from Equal Incomes for Two-Sided Matching," Working Papers 692, Barcelona School of Economics.
    3. Andreu Mas-Colell, 1992. "Equilibrium Theory with Possibly Satiated Preferences," Palgrave Macmillan Books, in: Mukul Majumdar (ed.), Equilibrium and Dynamics, chapter 9, pages 201-213, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    random assignment; ex-ante efficiency; weak core; sequential pseudomarket;
    All these keywords.

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General

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