Markovian Core, Indivisibility, and Successive Pareto-Improvements
Satoru Fujishige and
Discussion Papers from Department of Economics, University of York
We study a general barter market in which every agent is initially endowed with several inherently indivisible items and wishes to exchange with other agents. There is no medium of exchange like money. Agents have general preferences over bundles of items and may acquire several items. It is well-known that the core of such an economy is typically empty. We propose a new but more general notion of core called a Markovian core. A Markovian core allocation is individually rational, but Pareto-efficient and stable against any possible coalition deviation by comparison with their current assignments instead of their initial endowments. We show that the market has always a nonempty strict Markovian core through a decentralized Pareto-improvement process.
Keywords: Decentralized market; barter market; indivisibility; efficiency; stability; Markovian core. (search for similar items in EconPapers)
JEL-codes: C62 D72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-des, nep-mic and nep-ore
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