Designing a Strategy-Proof Spot Market Mechanism with Many Traders: Twenty-Two Steps to Walrasian Equilibrium

Peter Hammond

CRETA Online Discussion Paper Series from Centre for Research in Economic Theory and its Applications CRETA

Abstract: To prove their Walrasian equilibrium existence theorem, Arrow and Debreu (1954) devised an abstract economy that Shapley and Shubik (1977) cricitized 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 multi-stage market game. To achieve Walrasian outcomes in a large economy with incomplete information, even about traders' endowments, a strategy-proof demand revelation mechanism is considered, and then extended to include warehousing.

Keywords: market design; demand revelation; strategyproofness; hidden endowments; warehousing JEL classification numbers: C72; D41; D47; D51 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-gth
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https://warwick.ac.uk/fac/soc/economics/research/c ... ith_many_traders.pdf

Related works:
Journal Article: Designing a strategyproof spot market mechanism with many traders: twenty-two steps to Walrasian equilibrium (2017)
Working Paper: Designing a Strategy-Proof Spot Market Mechanism with Many Traders: Twenty-Two Steps to Walrasian Equilibrium (2016)
Working Paper: Designing a Strategy-Proof Spot Market Mechanism with Many Traders: Twenty-Two Steps to Walrasian Equilibrium (2016)
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