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Designing a strategyproof spot market mechanism with many traders: twenty-two steps to Walrasian equilibrium

Peter Hammond ()

Economic Theory, 2017, vol. 63, issue 1, 1-50

Abstract: Abstract To prove their Walrasian equilibrium existence theorem, Arrow and Debreu (Econometrica 22(3):265–290, 1954) devised an abstract economy that Shapley and Shubik (J Polit Econ 85:937–968, 1977) criticized as a market game because, especially with untrustworthy traders, it fails to determine a credible outcome away from equilibrium. All this earlier work also postulated a Walrasian auctioneer with complete information about traders’ preferences and endowments. To ensure credible outcomes, even in disequilibrium, warehousing is introduced into a multistage market game. To achieve Walrasian outcomes in a large economy with incomplete information, even about traders’ endowments, a strategyproof demand revelation mechanism is considered and then extended to include warehousing.

Keywords: Market design; Demand revelation; Strategyproofness; Hidden endowments; Warehousing (search for similar items in EconPapers)
JEL-codes: C72 D41 D47 D51 (search for similar items in EconPapers)
Date: 2017
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Related works:
Working Paper: Designing a Strategy-Proof Spot Market Mechanism with Many Traders: Twenty-Two Steps to Walrasian Equilibrium (2016) Downloads
Working Paper: Designing a Strategy-Proof Spot Market Mechanism with Many Traders: Twenty-Two Steps to Walrasian Equilibrium (2016) Downloads
Working Paper: Designing a Strategy-Proof Spot Market Mechanism with Many Traders: Twenty-Two Steps to Walrasian Equilibrium (2016) Downloads
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