 Impossibility results for parametrized notions of efficiency and strategy-proofness in exchange economiesWonki Cho () Games and Economic Behavior, 2014, vol. 86, issue C, 26-39 Abstract: We study a standard model of exchange economies with individual endowments. It is well known that no rule is individually rational, efficient, and strategy-proof. In order to quantify the extent of this impossibility, we parametrize axioms on allocation rules. Given an axiom A, a parametrization of A is a continuum of axioms {δ-A}δ∈[0,1] such that (i) δ-A is equivalent to A if and only if δ=1; (ii) δ-A is vacuous if and only if δ=0; and (iii) for each pair δ,δ′∈[0,1] with δ<δ′, δ′-A implies δ-A. Thus, as δ decreases from 1 to 0, δ-A weakens monotonically, eventually to a vacuous requirement. We consider two parametrizations {δ-efficiency}δ∈[0,1] and {δ-strategy-proofness}δ∈[0,1], and investigate their compatibility with individual rationality for the class of two-agent economies defined on the linear preference domain. We show that (i) for each δ∈(0,1], no rule is individually rational, δ-efficient, and strategy-proof; and (ii) for each δ∈(0,1], no rule is individually rational, efficient, and δ-strategy-proof. Keywords: Exchange economy; Individual rationality; δ-Efficiency; δ-Strategy-proofness (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:86:y:2014:i:c:p:26-39 DOI: 10.1016/j.geb.2014.03.003 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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