Decentralized Trade, Random Utility and the Evolution of Social Welfare

Michihiro Kandori, Roberto Serrano and Oscar Volij ()

No 42, Economics Working Papers from Institute for Advanced Study, School of Social Science

Abstract: We study decentralized trade processes in general exchange economies and house allocation problems with and without money. Such processes are subject to persistent random shocks stemming from agents’ maximization of random utility. By imposing structure on the utility noise term —logit distribution—, one is able to calculate exactly the stationary distribution of the perturbed Markov process for any level of noise. We show that the stationary distribution places the largest probability on the maximizer of several social welfare functions in different variants of the model.

Keywords: Decentralized Trade; Exchange Economies; Housing Markets; Stochastic Stability; Logit Model; Social Welfare Functions (search for similar items in EconPapers)
JEL-codes: C79 D51 D71 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2004-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sss.ias.edu/publications/papers/econpaper42.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sss.ias.edu/publications/papers/econpaper42.pdf [301 Moved Permanently]--> https://www.sss.ias.edu/publications/papers/econpaper42.pdf [301 Moved Permanently]--> https://www.ias.edu/sss/publications/papers/econpaper42.pdf)

Related works:
Journal Article: Decentralized trade, random utility and the evolution of social welfare (2008)
Working Paper: Decentralized trade, random utility and the evolution of social welfare (2005)
Working Paper: Decentralized Trade, Random Utility and the Evolution of Social Welfare (2004)
Working Paper: Decentralized Trade, Random Utility and the Evolution of Social Welfare (2004)
Working Paper: Decentralized Trade, Random Utility and the Evolution of Social Welfare
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ads:wpaper:0042

Access Statistics for this paper

More papers in Economics Working Papers from Institute for Advanced Study, School of Social Science Contact information at EDIRC.
Bibliographic data for series maintained by Nancy Cotterman ().