Implementation of the Walrasian correspondence th

Authors: Olivier Bochet

Publish Date: 2007/08/23

Volume: 36, Issue: 2, Pages: 301-316

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Abstract

Consider exchange economies in which preferences are continuous convex and strongly monotonic It is well known that the Walrasian correspondence is not Nash implementable Maskin monotonicity Maskin in Rev Econ Stud 6623–38 1999 is violated for Walrasian allocations on the boundary of the feasible set We derive an impossibility result showing that the Walrasian correspondence is in fact not implementable in any of the solution concepts considered in the implementation literature Next imposing an additional domain restriction we construct a sequential mechanism that doubly implements the Walrasian correspondence in subgame perfect and strong subgame perfect equilibrium The mechanism is based on priceallocation announcements and it fits the very description of Walrasian equilibrium We thus take care of the boundary problem that was prominent in the Nash implementation literatureI warmly thank the editor of this journal and two anonymous referees whose comments helped to improve this paper This paper is partially based on Chap 2 of my PhD thesis completed at Brown University I thank Francois Maniquet for comments and discussions on Sect 3 of the paper I also thank Roberto Serrano Rajiv Vohra and William Thomson for helpful discussions and comments on this topicThis article is published under an open access license Please check the Copyright Information section for details of this license and what reuse is permitted If your intended use exceeds what is permitted by the license or if you are unable to locate the licence and reuse information please contact the Rights and Permissions team

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