Equilibrium blocking in large quasilinear economies

Yusuke Kamishiro () and Roberto Serrano
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Yusuke Kamishiro: Brown University

No 2009-12, Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales

Abstract: We study information transmission in large interim quasilinear economies using the theory of the core. We concentrate on the core with respect to equilibrium blocking, a core notion in which information is transmitted endogenously within coalitions, as blocking can be understood as an equilibrium of a communication mechanism used by players in coalitions. We consider independent, ex-post and signal-based replicas of the basic economy. For each, we offer an array of negative and positive convergence results as a function of the complexity of the mechanisms used by coalitions. We identify conditions under which asymmetric information remains as an externality and non-market outcomes stay in the core, as well as those for the core to converge to the set of incentive compatible ex-post Walrasian allocations. Further, all the results are robust to the relaxation of the incentive constraints, and hence suggest a process through which information may get incorporated into a fully revealing equilibrium price function.

Keywords: core w.r.t. equilibrium blocking; core convergence; independent replicas; ex-post replicas; signal-based replicas; information transmission; communication mechanisms; mediation; rational expectations (search for similar items in EconPapers)
JEL-codes: C71 C72 D51 D82 (search for similar items in EconPapers)
Date: 2009-10-09
New Economics Papers: this item is included in nep-cta and nep-gth
Note: 43(6), June 2011: 1248-1267
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Citations: View citations in EconPapers (3)

Published in Mathematics of Operations Research 36(3) August 2011: 552–567

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Related works:
Working Paper: Equilibrium Blocking in Large Quasilinear Economies (2009)
Working Paper: Equilibrium Blocking in Large Quasilinear Economies (2009)
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