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A Unique Informationally Efficient and Decentralized Mechanism with Fair Outcomes

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  • Calsamiglia, Xavier
  • Kirman, Alan

Abstract

It is shown that any informationally decentralized mechanism that realizes fair allocations over the class of classical pure exchange environments has a message space of dimension no smaller than the number of agents times the number of commodities. Since the equal income Walrasian mechanism, in which all agents take prices parametrically and maximize utility subject to the average income constraint, realizes fair outcomes over the class of classical pure exchange environments and has a message space of that dimension, it is informationally efficient. Further, it is shown that it is the unique informationally efficient mechanism realizing fair allocations. Copyright 1993 by The Econometric Society.

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  • Calsamiglia, Xavier & Kirman, Alan, 1993. "A Unique Informationally Efficient and Decentralized Mechanism with Fair Outcomes," Econometrica, Econometric Society, vol. 61(5), pages 1147-1172, September.
    • Handle: RePEc:ecm:emetrp:v:61:y:1993:i:5:p:1147-72
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    2. Tian, Guoqiang, 2004. "On the Informational Requirements of Decentralized Pareto-Satisfactory Mechanisms in Economies with Increasing Returns," MPRA Paper 41226, University Library of Munich, Germany, revised Oct 2006.
    3. Bosch-Domenech, Antoni & Silvestre, Joaquim, 1997. "Credit Constraints in General Equilibrium: Experimental Results," Economic Journal, Royal Economic Society, vol. 107(444), pages 1445-1464, September.
    4. Thomson, William, 2011. "Chapter Twenty-One - Fair Allocation Rules," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 2, chapter 21, pages 393-506, Elsevier.
    5. Maître Philippe, 1999. "La Notion D'equite : Une Revue," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 9(1), pages 107-130, March.
    6. Guoqiang Tian, 2006. "The unique informational efficiency of the competitive mechanism in economies with production," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 26(1), pages 155-182, January.
    7. Alan Kirman, 2006. "Demand Theory and General Equilibrium: From Explanation to Introspection, a Journey down the Wrong Road," History of Political Economy, Duke University Press, vol. 38(5), pages 246-280, Supplemen.
    8. Thomas Marschak, 1996. "On economies of scope in communication," Review of Economic Design, Springer;Society for Economic Design, vol. 2(1), pages 1-31, December.
    9. Jose Aizpurua & Antonio Manresa, 1994. "A decentralized and informationally efficient mechanism realizing fair outcomes in economies with public goods," Review of Economic Design, Springer;Society for Economic Design, vol. 1(1), pages 141-158, December.
    10. Marschak, Thomas & Reichelstein, Stefan, 1998. "Network Mechanisms, Informational Efficiency, and Hierarchies," Journal of Economic Theory, Elsevier, vol. 79(1), pages 106-141, March.
    11. Tian, Guoqiang, 2001. "The Unique Informational Effciency of the Lindahl Allocation Process in Economies with Public Goods," MPRA Paper 41229, University Library of Munich, Germany, revised Oct 2005.

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