Implementing efficient allocations in a model of financial intermediation

Edward Green and Ping Lin

No 576, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: In a finite-trader version of the Diamond-Dybvig (1983) model, the symmetric, ex-ante efficient allocation is implementable by a direct mechanism (i.e., each trader announces the type of his own ex-post preference) in which truthful revelation is the strictly dominant strategy for each trader. When the model is modified by formalizing the sequential-service constraint (cf. Wallace, 1988), the truth-telling equilibrium implements the symmetric, ex-ante efficient allocation with respect to iterated elimination of strictly dominated strategies.

Keywords: Econometric; models (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (15)

Published in Journal of Economic Theory (Vol. 109, No. 1, March 2003, pp. 1-23)

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Related works:
Journal Article: Implementing efficient allocations in a model of financial intermediation (2003)
Working Paper: Implementing the efficient allocation in a model of financial intermediation (1996)
Working Paper: Implementing Efficient Allocations in a Model of Financial Intermediation (1995)
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