Constrained Pseudo-Market Equilibrium

Federico Echenique and Antonio Miralles

No 1149, Working Papers from Barcelona School of Economics

Abstract: We propose a market solution to the problem of resource allocation subject to quantitative constraints, such as those imposed by considerations of diversity or geographical distribution. Constraints are "priced," and agents are charged to the extent that their purchases a ect the value (at equilibrium prices) of the relevant constraints. The result is a constrained-efficient market equilibrium outcome. The outcome is fair whenever the constraints do not single out individual agents, which happens, for example with geographical distribution constraints. In economies with endowments, moreover, our equilibrium outcomes are constrained efficient and approximately individually rational.

Keywords: general equilibrium; random assignments; pricing constraints (search for similar items in EconPapers)
JEL-codes: C78 D47 D50 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-des and nep-ore
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Citations: View citations in EconPapers (4)

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Journal Article: Constrained Pseudo-Market Equilibrium (2021)
Working Paper: Constrained Pseudo-market Equilibrium (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1149

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