Implementation of the Walrasian correspondence: the boundary problem (Q2458426)

In this paper it is shown for exchange economies with special preferences firstly, that Walrasian correspondences (mappings, that associate to each economy (preference profile) their set of Walrasian allocations) are not implementable in any of the (responsive) solution concepts considered in the implementation literature. This happens because of the so-called boundary problem: A Walrasian correspondence depends also on the shape of some preferences outside the feasible set. Secondly under conditions imposing especially differentiability of preferences, i.e. of their utility functions, some special results follow implementing the Walrasian correspondence in subgame perfect and strong subgame perfect equilibrium.