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Non Fixed-Price Trading Rules In Single-Crossing Classical Exchange Economies

Author

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  • Mridu Prabal Goswami

    () (BGU)

Abstract

This paper defines the single-crossing property for two-agent, two-good exchange economies for classical (i.e., continuous, strictly monotonic, and strictly convex) individual preferences. Within this framework and on a rich single-crossing domain, the paper characterizes the family of continuous, strategy-proof and individually rational social choice functions whose range belongs to the interior of the set of feasible allocations. This family is shown to be the class of generalized trading rules. This result highlights the importance of the concavification argument in the characterization of fixed-price trading rules provided by Barber? and Jackson (1995), an argument that does not hold under single-crossing. The paper also shows how several features of abstract single-crossing domains, such as the existence of an ordering over the set of preference relations, can be derived endogenously in economic environments by exploiting the additional structure of classical preferences.

Suggested Citation

  • 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.
  • Handle: RePEc:bgu:wpaper:1311
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    File URL: http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/1311.pdf
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    References listed on IDEAS

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    1. Gershkov, Alex & Moldovanu, Benny & Shi, Xianwen, 2013. "Optimal Voting Rules," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 417, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, pages 219-237.
    3. Alejandro Saporiti & Fernando Tohmé, 2006. "Single-Crossing, Strategic Voting and the Median Choice Rule," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 26(2), pages 363-383, April.
    4. Pablo Amorós & M. Puy, 2010. "Indicators of electoral victory," Public Choice, Springer, vol. 144(1), pages 239-251, July.
    5. Momi, Takeshi, 2013. "Note on social choice allocation in exchange economies with many agents," Journal of Economic Theory, Elsevier, pages 1237-1254.
    6. Barberà, Salvador & Moreno, Bernardo, 2011. "Top monotonicity: A common root for single peakedness, single crossing and the median voter result," Games and Economic Behavior, Elsevier, pages 345-359.
    7. 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.
    8. repec:oup:restud:v:84:y:2017:i:2:p:688-717. is not listed on IDEAS
    9. Alex Gershkov & Benny Moldovanu & Xianwen Shi, 2017. "Optimal Voting Rules," Review of Economic Studies, Oxford University Press, vol. 84(2), pages 688-717.
    10. Ma, Jinpeng, 1994. "Strategy-Proofness and the Strict Core in a Market with Indivisibilities," International Journal of Game Theory, Springer;Game Theory Society, pages 75-83.
    11. Goswami, Mridu Prabal & Sen, Arunava & Mitra, Manipushpak, 2014. "Strategy-proofness and Pareto-efficiency in quasi-linear exchange economies," Theoretical Economics, Econometric Society.
    12. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, pages 355-374.
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    Cited by:

    1. Mridu Goswami & Arunava Sen & Sonal Yadav, 2015. "A Hurwicz type result in a model with public good production," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(4), pages 867-887, December.

    More about this item

    Keywords

    social choice; classical preference; single-crossing; concavification.;

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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