Asymptotically Strategy-Proof Walrasian Exchange

Jose M. Cordoba and Peter Hammond ()

Working Papers from Stanford University, Department of Economics

Abstract: February 1998

In smooth exchange economies with a continuum of agents, any Walrasian mechanism is Pareto efficient, individually rational, anonymous, and strategy-proof. Barberà and Jackson's (1995) results imply that no such efficient mechanism is the limit of resource-balanced, individually rational, anonymous and non-bossy strategy-proof allocation mechanisms for an expanding sequence of finite economies. For a broad class of smooth random exchange economies, relaxing anonymity and non-bossiness admits mechanisms which, as the economy becomes infinitely large, are asymptotically Walrasian for all except one ``balancing'' agent, while being manipulable with generically vanishing probability. Also considered are some extensions to non-Walrasian mechanisms.

JEL classification: D82, D61, D5

Keywords: strategy-proofness, mechanism design, random economies, Walrasian equilibrium.

Keywords: strategy-proofness; mechanism design; random economies; Walrasian equilibrium (search for similar items in EconPapers)
JEL-codes: D82 D61 D5 (search for similar items in EconPapers)
Date: 1998-02
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Journal Article: Asymptotically strategy-proof Walrasian exchange (1998)
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