Hammond, Peter J., 1945- (2007) Competitive market mechanisms as social choice procedures. Discussion Paper. University of Warwick Economics Department, [Coventry].

Preview

PDF WRAP_Hammond_twerp_804.pdf - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader Download (635Kb)

Abstract

A competitive market mechanism is a prominent example of a non-binary social choice rule, typically defined for a special class of economic environments in which each social state is an economic allocation of private goods, and individuals' preferences concern only their own personal consumption. This chapter begins by discussing which Pareto efficient allocations can be characterized as competitive equilibria with lump-sum transfers. It also discusses existence and characterization of such equilibria without lump-sum transfers. The second half of the chapter focuses on continuum economies, for which such characterization results are much more natural given that agents have negligible influence over equilibrium prices.

Item Type:	Working or Discussion Paper (Discussion Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Social choice, Economics -- Mathematical models
Series Name:	Warwick economic research papers
Publisher:	University of Warwick Economics Department
Place of Publication:	[Coventry]
Date:	11 July 2007
Number:	No.804
Number of Pages:	111
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
References:	Aliprantis, C.D. and Border, K. (1999). Infinite dimensional analysis: a hitchhiker’s guide. 2nd. ed. Berlin: Springer. Aliprantis, C.D., Brown, D.J. and Burkinshaw, O. (1987a). Edgeworth equilibria. Econometrica, 55, pp.1109–37. Aliprantis, C.D., Brown, D.J. and Burkinshaw, O. (1987b). Edgeworth equilibria in production economies. Journal of Economic Theory, 43, pp.252–91. Allais, M. (1947). Economie et intérêt. Paris: Imprimerie Nationale. Arrow, K.J. (1951a). An extension of the basic theorems of classical welfare economics. In Neyman, J., ed. Proceedings of the second Berkeley symposium on mathematical statistics and probability. Berkeley: University of California Press. pp. 507–532; reprinted in Collected papers of Kenneth J. Arrow, Vol. 2: General equilibrium. (1983). Cambridge, Mass.: Belknap Press of Harvard University Press. Arrow, K.J. (1951b). Alternative proof of the substitution theorem for Leontief Models in the general case. In T.C. Koopmans, ed. Activity analysis of production and allocation. New York: Wiley. Ch. 9, pp. 155–164; reprinted in Collected papers of Kenneth J. Arrow, Vol. 2: General equilibrium. (1983). Cambridge, Mass.: Belknap Press of Harvard University Press. Arrow, K.J. and Debreu, G. (1954). Existence of equilibrium for a competitive economy. Econometrica, 22, pp.265–290. Arrow, K.J. and Hahn, F.H. (1971). General competitive analysis. San Francisco: Holden-Day. Aumann, R.J. (1964). Markets with a continuum of traders. Econometrica, 32, pp.39–50. Aumann, R.J. (1975). Values of markets with a continuum of traders. Econometrica, 43, pp.611–646. Aumann, R.J. and Shapley, L. (1974). Values of non-atomic games. Princeton: Princeton University Press. Bergstrom, T.C. (1976). How to discard ‘free disposability’ - at no cost. Journal of Mathematical Economics, 3, pp.131–134. Bergstrom, T.C. (1996). Nonsubstitution theorems for a small trading country. Pacific Economic Review, 1, pp.117–135. Bhagwati, J.N. (1958). Immiserizing growth: a geometrical note. Review of Economic Studies, 25, pp.201–205. Bhagwati, J.N. (1987). Immiserizing growth. In Eatwell, J., Milgate, M. and Newman, P., eds. The New palgrave: a dictionary of economics. London: Macmillan. Bhagwati, J.N. and Wan, H. (1979). The ‘Stationarity’ of shadow prices of factors in project evaluation, with or without distortions. American Economic Review, 69, pp.261–273. Blackorby, C. and Donaldson, D. (1988). Cash versus kind, self-selection, and efficient transfers. American Economic Review, 78, pp.691–700. Calsamiglia, X. and Kirman, A. (1993). A Unique informationally efficient and decentralized mechanism with fair outcomes. Econometrica, 61, pp.1147–72. Champsaur, P. and Laroque, G. (1981). Fair allocations in large economies. Journal of Economic Theory, 25, pp.269–282. Champsaur, P. and Laroque, G. (1982). A Note on incentives in large economies. Review of Economic Studies, 49, pp.627–635. Chander, P. (1983). On the informational size of message spaces for efficient resource allocation processes. Econometrica, 51, pp.919–38. Coles, J.L. and Hammond, P.J. (1995). Walrasian equilibrium without survival: equilibrium, efficiency, and remedial policy. In Basu, K., Pattanaik, P.K., and Suzumura, K., eds. Choice, welfare and development: a festschrift in honour of Amartya K. Sen. Oxford: Oxford University Press. Ch. 3, pp. 32–64. Dagan, N. (1995). Consistent solutions in exchange economies: a characterization of the price mechanism. Economics Working Paper 141, Universitat Pompeu Fabra, Barcelona. Dagan, N. (1996). Consistency and the Walrasian allocations correspondence. Economics Working Paper 151, Universitat Pompeu Fabra, Barcelona. Dasgupta, P.S., Hammond, P.J. and Maskin, E.S. (1979). The Implementation of social choice rules: some general results on incentive compatibility. Review of Economic Studies, 46, pp. 185–216. Dasgupta, P. and Ray, D. (1986). Inequality as a determinant of malnutrition and unemployment: theory. Economic Journal, 96, pp.1011–1034. Debreu, G. (1951). The Coefficient of resource utilization. Econometrica, 22, pp.273–292. Debreu, G. (1954). Valuation equilibrium and pareto optimum. Proceedings of the National Academy of Sciences, 40, pp.588–592; reprinted in Mathematical Economics: Twenty Papers of Gerard Debreu. (1983). Cambridge: Cambridge University Press. Debreu, G. (1959). Theory of value: an axiomatic analysis of economic equilibrium. New York: John Wiley. Debreu, G. (1962). New concepts and techniques for equilibrium analysis. International Economic Review, 3, pp.257–273. Debreu, G. (1969). Neighboring economic agents. In La Décision (Colloques Internationaux du Centre de la Recherche Scientifique), 171, pp.85–90; reprinted in Mathematical economics: twenty papers of Gerard Debreu. (1983). Cambridge: Cambridge University Press. Debreu, G. and Scarf, H. (1963). A Limit theorem on the core of an economy. International Economic Review, 4, pp.235–246. Diamantaras, D. and Gilles, R.P. (2004). On the microeconomics of specialization. Journal of Economic Behavior and Organization, 55, pp.223–236. Diewert, W.E. (1983). Cost–benefit analysis and project evaluation: a comparison of alternative approaches. Journal of Public Economics, 22, pp.265–302. Dubey, P., Mas-Colell, A. and Shubik, M. (1980). Efficiency properties of strategic market games: an axiomatic approach. Journal of Economic Theory, 22, pp.339–362. Dudley, R.M. (1989). Real analysis and probability. New York: Chapman & Hall. Dutta, B., Ray, D., Sengupta, K. and Vohra, R. (1989). A consistent bargaining set. Journal of Economic Theory, 49, pp.93–112. Eaves, B.C. (1976). A Finite algorithm for the linear exchange model. Journal of Mathematical Economics, 3, pp.197–203. Edgeworth, F.Y. (1881). Mathematical psychics. London: Kegan Paul. Fisher, F.M. (1981). Stability, disequilibrium awareness, and the perception of new opportunities. Econometrica, 49, pp.279–317. Fisher, F.M. (1983). Disequilibrium foundations of equilibrium economics. Cambridge: Cambridge University Press. Fisher, F.M. and Saldanha, F.M.C.B. (1982). Stability, disequilibrium awareness, and the perception of new opportunities: some corrections. Econometrica, 50, pp.781–783. Florig, M. (2001a). Hierarchic competitive equilibria. Journal of Mathematical Economics, 35, pp.515–546. Florig, M. (2001b). On irreducible economies. Annales d’économie et de statistique, 61, pp.183–199. Foley, D.K. (1967). Resource allocation and the public sector. Yale Economic Essays, 7, pp.45–198. Foley, D.K. (1970a). Lindahl’s solution and the core of an economy with public goods. Econometrica, 38, pp.66–72. Foley, D.K. (1970b). Economic equilibrium with costly marketing. Journal of Economic Theory, 2, pp.276-291. Gale, D. (1957). Price equilibrium for linear models of exchange. Technical Report P-1156, RAND Corporation. Gale, D. (1976). The Linear exchange model. Journal of Mathematical Economics, 3, pp.204–209. Gale, D. and Mas-Colell, A. (1975). An Equilibrium existence theorem for a general model without ordered preferences. Journal of Mathematical Economics, 2, pp.9–15. Gale, D.M (1980). Money, information and equilibrium in large economies. Journal of Economic Theory, 23, pp.28–65. Gale, D.M. (1982). Money: in equilibrium. Welwyn: James Nisbet. Geanakoplos, J. and Polemarchakis, H. (1991). Overlapping generations. In Hildenbrand, W. and Sonnenschein, H., eds. Handbook of mathematical economics. Vol. IV. Amsterdam: North-Holland. Ch. 35, pp.1899–1960. Georgescu-Roegen, N. (1951). Some properties of a generalized leontief model. In T.C. Koopmans, ed. Activity analysis of production and allocation. New York: Wiley. Ch. 10, pp.165–176. Gevers, L. (1986). Walrasian social choice: some axiomatic approaches. In Heller, W.P., Starr, R.M. and Starrett, D.A., eds. Social choice and public decision making: essays in honor of Kenneth J. Arrow, Vol. I. Cambridge: Cambridge University Press. Ch. 5, pp.97–114. Greenberg, J. (1990). The Theory of social situations: an alternative game-theoretic approach. Cambridge: Cambridge University Press. Grossman, S.J. (1977). A Characterization of the optimality of equilibrium in incomplete markets. Journal of Economic Theory, 15, pp.1–15. Guesnerie, R. (1981). On Taxation and incentives: further reflections on the limits of redistribution. Discussion Paper No. 89, Sonderforschungsbereich 21, University of Bonn; revised as Ch. 1 of Guesnerie (1995). Guesnerie, R. (1995). A Contribution to the pure theory of taxation. Cambridge: Cambridge University Press. Hammond, P.J. (1979). Straightforward individual incentive compatibility in large economies. Review of Economic Studies, 46, pp.263–282. Hammond, P.J. (1986). Project evaluation by potential tax reform. Journal of Public Economics, 30, pp.1–36. Hammond, P.J. (1987). Markets as constraints: multilateral incentive compatibility in continuum economies. Review of Economic Studies, 54, pp.399–412. Hammond, P.J. (1993). Irreducibility, resource relatedness, and survival in equilibrium with individual non-convexities. In Becker, R., Boldrin, M., Jones, R., and Thomson, W., eds. General equilibrium, growth, and trade II: the legacy of Lionel W. McKenzie. San Diego: Academic Press. Ch. 4, pp. 73–115. Hammond, P.J. (1995). Four characterizations of constrained pareto efficiency in continuum economies with widespread Externalities,” Japanese Economic Review, 46, pp.103–124. Hammond, P.J. (1998). The Efficiency theorems and market failure. In Kirman, A.P., ed. Elements of general equilibrium analysis. Oxford:Basil Blackwell. Ch. 6, pp.211–260. Hammond, P.J. (1999a). On f-Core equivalence in a continuum economy with general widespread externalities. Journal of Mathematical Economics, 32, pp.177–184. Hammond, P.J. (1999b). Multilaterally strategy-proof mechanisms in random Aumann–Hildenbrand macroeconomies. In Wooders, M., ed. Topics in game theory and mathematical economics: essays in honor of Robert J. Aumann. Providence, RI: American Mathematical Society. pp. 171–187. Hammond, P.J. (1999c). History as a widespread externality in some Arrow–Debreu market games. In G. Chichilnisky, ed. Markets, information and uncertainty: essays in economic theory in honor of Kenneth J. Arrow. (1999). Cambridge: Cambridge University Press. Ch. 16, pp.328–361. Hammond, P.J. (2003). Equal rights to trade and mediate. Social Choice and Welfare, 21, pp.181–193. Hammond, P.J., Kaneko, M. and Woodersm, M.H. (1989). Continuum economies with finite coalitions: core, equilibrium and widespread externalities. Journal of Economic Theory, 49, pp.113–134. Hart, S. (2002). Values of perfectly competitive economies. In Aumann, R. and Hart, S., eds. Handbook of game theory with economic applications, Vol. III. Amsterdam: North-Holland, Ch. 57, pp.2169–2184. Haubrich, J.G. (1988). Optimal financial structure in exchange economies. International Economic Review, 29, pp.217–235. Haubrich, J.G. and King, R.G. (1990). Banking and insurance. Journal of Monetary Economics, 26, pp.361–386. Hildenbrand, W. (1972). Metric measure spaces of economic agents. In Le Cam, L., Leyman, N. and Scott, E.L., eds. Proceeedings of the sixth Berkeley symposium on mathematical statistics and probability, Vol. II. Berkeley: University of California Press. Pp.81–95. Hildenbrand, W. (1974). Core and equilibrium of a large economy. Princeton: Princeton University Press. Hurwicz, L. (1960). Optimality and informational efficiency in resource allocation processes. In Arrow, K.J., Karlin, S. and Suppes, P., eds. Mathematical methods in the social sciences 1959. Stanford: Stanford University Press. Pp. 27–46. Hurwicz, L. (1972). On Informationally decentralized systems. In McGuire, C.B. and Radner, R., eds. Decisions and organization. Amsterdam: North-Holland. Ch. 14, pp.297–336. Hurwicz, L. (1977). On the dimensional requirements of informationally decentralized Pareto-Satisfactory processes. In Arrow, K.J. and Hurwicz, L., eds. Studies in resource allocation processes. Cambridge: Cambridge University Press. Pp.413–424. Hurwicz, L. (1986). Incentive aspects of decentralization. In Arrow, K.J. and Intriligator, M.D., eds. Handbook of mathematical economics, Vol. III. Amsterdam: North-Holland. Ch. 28, pp.1441–1482. Hurwicz, L. and Marschak, T. (2003). Finite allocation mechanisms: approximate Walrasian versus approximate direct revelation. Economic Theory, 21, pp.545–572. Hurwicz, L., Maskin, E. and Postlewaite, A. (1995). Feasible implementation of social choice correspondences by Nash equilibria. In Ledyard, J.O., ed. The Economics of informational decentralization: complexity, efficiency, and stability: essays in honor of Stanley Reiter. Dordrecht: Kluwer Academic Publishers. Pp. 367–433. Jacklin, C.J. (1987). Demand deposits, trading restrictions, and risk sharing. In Prescott, E.C. and Wallace, N., eds. Contractual arrangements for intertemporal trade. Minneapolis: University of Minnesota Press. Pp.26–47. Jordan, J.S. (1982). The Competitive allocation process is informationally efficient uniquely. Journal of Economic Theory, 28, pp.1–18. Kaneko, M. (1977). The Ratio equilibrium and a voting game in public goods economy. Journal of Economic Theory, 16, pp.123–136. Kaneko, M. and Wooders, M.H. (1986). The Core of a game with a continuum of players and finite coalitions: the model and some results. Mathematical Social Sciences, 12, pp.105–137. Kaneko, M. and Wooders, M.H. (1989). The Core of a continuum economy with widespread externalities and finite coalitions: from finite to continuum economies. Journal of Economic Theory, 49, pp.135–168. Kaneko, M. and Wooders, M.H. (1994). Widespread externalities and perfectly competitive markets: examples. In Gilles, R.P. and Ruys, P.H.M., eds. Imperfections and behavior in economic organizations. Boston: Kluwer Academic Publishers. Ch. 4, pp. 71–87. Kannai, Y. (1977). Concavifiability and construction of concave utility functions. Journal of Mathematical Economics, 4, pp.1–56. Khan, M.A. and Yamazaki, A. (1981). On the cores of economies with indivisible commodities and a continuum of traders. Journal of Economic Theory, 24, pp.218–225. Koopmans, T.C. (1951). Alternative proof of the substitution theorem for Leontief models in the case of three industries. In Koopmans, T.C., ed. Activity analysis of production and allocation. New York: Wiley. Ch. 8, pp.147–154. Koopmans, T.C. (1957). Three essays on the state of economic science. New York: Wiley. Loeb, P.A. and Talvila, E. (2004). Lusin’s theorem and Bochner integration. Scientiae Mathematicae Japonicae, 10, pp.55–62. Lucas, R.E. (1978). Asset prices in an exchange economy. Econometrica, 46, pp.1429–1446. Makowski, L. and Ostroy, J.M. (1995). Appropriation and efficiency: a revision of the first theorem of welfare economics. American Economic Review, 85, pp.808–827. Makowski, L. and Ostroy, J.M. (1998). Arbitrage and the flattening effect of large numbers. Journal of Economic Theory, 78, pp.1–31. Makowski, L. and Ostroy, J.M. (2001). Perfect competition and the creativity of the market. Journal of Economic Literature, 39, pp.479–535. Makowski, L. Ostroy, J. and Segal, U. (1999). Efficient incentive compatible mechanisms are perfectly competitive. Journal of Economic Theory, 85, pp.169–225. Maniquet, F. and Sprumont, Y. (1999). Efficient strategy-proof allocation functions in linear production economies. Economic Theory, 14, pp.583–595. Mas-Colell, A. (1977). Indivisible commodities and general equilibrium theory. Journal of Economic Theory, 16, pp.443–456. Mas-Colell, A. (1985). The Theory of general economic equilibrium: a differentiable approach. Cambridge: Cambridge University Press. Mas-Colell, A. (1989). An Equivalence theorem for a bargaining set. Journal of Mathemetical Economics, 18, pp.129–139. Mas-Colell, A. and Vives, X. (1993). Implementation in economies with a continuum of agents. Review of Economic Studies, 60, pp.613–629. Maskin, E. (1999). Nash equilibrium and welfare optimality. Review of Economic Studies, 66, pp.23–38. McKenzie, L.W. (1957). Demand theory without a utility index. Review of Economic Studies, 24, pp.185–189. McKenzie, L.W. (1959, 1961). On the existence of general equilibrium for a competitive market. Also, Som
URI:	http://wrap.warwick.ac.uk/id/eprint/12

Request changes to a record

Actions (login required)

View Item