Trade, expropriation and allocation
Allocation rules map preference profiles into allocations, whereas trading rules map preference profiles and allocations into allocations. It is shown that no allocation rule can derive from a trading rule based on voluntary trade and satisfying a weak efficiency condition. If the trading rule allows compulsory trade then the only allocation rules that can derive from a trading rule satisfying certain additional mild conditions are those having a hierarchy of dictators. These results contribute to accentuate the difference between centralized and decentralized allocation mechanisms.
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