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The ex ante incentive compatible core in the absence of wealth effects

  • Forges, Françoise
  • Mertens, Jean-François
  • Vohra, Rajiv

In a differential information economy with quasi–linear utilities, monetary transfers facilitate the fulfillment of incentive compatibility constraints : the associated ex ante core is generically nonempty. However, we exhibit a well–behaved exchange economy in which this core is empty, even if goods are allocated through random mechanisms.

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Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/5454.

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Date of creation: 2002
Date of revision:
Publication status: Published in Econometrica, 2002, Vol. 70, no. 5
Handle: RePEc:dau:papers:123456789/5454
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  11. Claude d'Aspremont & Jacques Crémer & Louis-André Gérard-Varet, 2003. "Correlation, independence, and Bayesian incentives," Social Choice and Welfare, Springer, vol. 21(2), pages 281-310, October.
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