Efficient Strategy-Proof Exchange and Minimum Consumption Guarantees
For exchange economies with classical economic preferences, it is shown that any strategy-proof social choice function that selects Pareto optimal outcomes cannot guarantee everyone a consumption bundle bounded away from the origin. This result demonstrates that there is a fundamental conflict between efficiency and distributional goals in exchange economies if the social choice rule is required to be strategy-proof.
|Date of creation:||Jun 2002|
|Date of revision:||Aug 2002|
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1021, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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