Two-sided allocation problems, decomposability, and the impossibility of efficient trade
David Delacretaz,
Simon Loertscher,
Leslie Marx and
Tom Wilkening
Journal of Economic Theory, 2019, vol. 179, issue C, 416-454
Abstract:
Previous literature has shown that private information is a transaction cost that prevents efficient reallocation in two-sided setups with bilateral trade or homogeneous goods. We derive conditions under which the impossibility of efficient trade extends to rich environments in which buyers and sellers have multi-dimensional private types, accommodating many-to-many trades and heterogeneous objects. If agents can be decomposed into unit constituents, the allocation problem can be represented as an assignment game and impossibility obtains through a generalization of Shapley's (1962) result that buyers and sellers are complements. We introduce a general family of payoff functions that ensures decomposability and thus impossibility.
Keywords: Mechanism design; Assignment games; Impossibility theorems; Decomposability; Size-dependent discounts (search for similar items in EconPapers)
JEL-codes: C72 D44 D61 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053118306793
Full text for ScienceDirect subscribers only
Related works:
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:eee:jetheo:v:179:y:2019:i:c:p:416-454
DOI: 10.1016/j.jet.2018.11.004
Access Statistics for this article
Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell
More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().