Efficient incentive compatible economies are perfectly competitive

DOI10.1006/JETH.1998.2494MaRDI QIDQ1290837zbMATH OpenOpenAlexFDO

Authors Louis Makowski, Joseph M. Ostroy, Uzi Segal

Publication date 3 June 1999

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://semanticscholar.org/paper/4ffdc43b99bcba3265fc45940e1cc24f180e1cec

zbMATH Keywords

general equilibriumincentive compatibleperfect competition

Mathematics Subject Classification ID

Resource and cost allocation (including fair division, apportionment, etc.) (91B32) General equilibrium theory (91B50)

Review text

Consider an exchange economy with a finite number of traders. Let \(M\) be an efficient, anonymous, and continuous mechanism on such an economy. The main result of the paper is that \(M\) is incentive compatible in dominant strategies if and only if \(M\) is perfectly competitive. As is well known, existence is an issue -- perfect competition is almost always incompatible with a finite number of traders. The paper explores this issue closely, showing that perfectly competitive mechanisms are non-generic (but non-vacuous) with a finite number of traders.

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Cites work

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Cited in

(14)

• Vickrey-Clarke-Groves mechanisms and perfect competition
• Perfect competition in the continuous assignment model
• Designing efficient and incentive compatible mechanisms is almost impossible in quasi-linear environments
• Competitive pricing and the core: with reference to matching
• Power at general equilibrium
• Foundations of pseudomarkets: Walrasian equilibria for discrete resources
• No externalities: a characterization of efficiency and incentive compatibility with public goods
• The efficiency of competitive mechanisms under private information
• STRATEGIC EQUILIBRIA WITH PARTIALLY CONSUMABLE WITHHOLDINGS
• scientific article; zbMATH DE number 3894786 (Why is no real title available?)
• Economic efficiency requires interaction
• Efficiency and maximality in anonymous two-sided economies
• Equilibrium and social norms
• Ex ante efficiency implies incentive compatibility

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