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The relation between implementability and the core

Eiichi Miyagawa

Title:
The relation between implementability and the core
Author(s):
Miyagawa, Eiichi
Date:
Type:
Working papers
Department:
Economics
Permanent URL:
Series:
Department of Economics Discussion Papers
Part Number:
0102-64
Publisher:
Department of Economics, Columbia University
Publisher Location:
New York
Abstract:
This paper proves a simple and general theorem on resource-allocation mechanisms that achieve Pareto efficiency. We say that a mechanism (game form) is normal if at any action profile, an agent who obtains his endowments neither pays nor receives a positive amount. In the context of auctions, this simply means that losers receive no bill. We prove that for any normal mechanism, if its Nash equilibrium allocations are Pareto efficient for all preference profiles, then the equilibrium allocations are necessarily in the core. The result holds for a large class of allocation problems in which monetary transfers are feasible and the consumption space is discrete except for the space of transfers. Examples include auctions with any number of objects, economies with indivisible public goods, marriage problems, and coalition formation.
Subject(s):
Economic theory
Item views:
132
Metadata:
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