Incentives and competitive allocations in exchange economies with incomplete markets

David Wettstein

doi:10.1016/0304-4068(94)00689-8

Incentives and competitive allocations in exchange economies with incomplete markets

David Wettstein

Department of Economics

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

This paper concentrates on the problems created by strategic behaviour in the presence of incomplete markets. We show that the set of constrained Pareto optimal allocations as well as the set of undominated competitive equilibria are not Nash implementable. In contrast a slightly modified version of competitive equilibria namely endowment constrained competitive equilibria (ECCE) is shown to be Nash implementable by a continuous and feasible mechanism.

Original language	English
Pages (from-to)	201-216
Number of pages	16
Journal	Journal of Mathematical Economics
Volume	24
Issue number	3
DOIs	https://doi.org/10.1016/0304-4068(94)00689-8
State	Published - 1 Jan 1995

Keywords

Incentives
Incomplete markets
Nash implementation

ASJC Scopus subject areas

Economics and Econometrics
Applied Mathematics

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10.1016/0304-4068(94)00689-8

Cite this

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abstract = "This paper concentrates on the problems created by strategic behaviour in the presence of incomplete markets. We show that the set of constrained Pareto optimal allocations as well as the set of undominated competitive equilibria are not Nash implementable. In contrast a slightly modified version of competitive equilibria namely endowment constrained competitive equilibria (ECCE) is shown to be Nash implementable by a continuous and feasible mechanism.",

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AB - This paper concentrates on the problems created by strategic behaviour in the presence of incomplete markets. We show that the set of constrained Pareto optimal allocations as well as the set of undominated competitive equilibria are not Nash implementable. In contrast a slightly modified version of competitive equilibria namely endowment constrained competitive equilibria (ECCE) is shown to be Nash implementable by a continuous and feasible mechanism.

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KW - Incomplete markets

KW - Nash implementation

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DO - 10.1016/0304-4068(94)00689-8

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Incentives and competitive allocations in exchange economies with incomplete markets

Abstract

Keywords

ASJC Scopus subject areas

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