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Core Convergence with Asymmetric Information

Author

Listed:
  • Richard McLean

    (Department of Economics, Rutgers University)

  • Andrew Postlewaite

    (Department of Economics, University of Pennsylvania)

Abstract

We analyze the ex ante incentive compatible core for replicated private information economies. We show that any allocation in the core when the economy is replicated sufficiently often is approximately Walrasian for the associated Arrow-Debreu economy.

Suggested Citation

  • Richard McLean & Andrew Postlewaite, 2003. "Core Convergence with Asymmetric Information," PIER Working Paper Archive 03-027, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:03-027
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    References listed on IDEAS

    as
    1. Roberto Serrano & Rajiv Vohra & Oscar Volij, 2001. "On the Failure of Core Convergence in Economies with Asymmetric Information," Econometrica, Econometric Society, vol. 69(6), pages 1685-1696, November.
    2. Einy, Ezra & Moreno, Diego & Shitovitz, Benyamin, 2000. "Rational expectations equilibria and the ex-post core of an economy with asymmetric information," Journal of Mathematical Economics, Elsevier, vol. 34(4), pages 527-535, December.
    3. Vohra, Rajiv, 1999. "Incomplete Information, Incentive Compatibility, and the Core," Journal of Economic Theory, Elsevier, vol. 86(1), pages 123-147, May.
    4. Françoise Forges & Aviad Heifetz & Enrico Minelli, 2005. "Incentive compatible core and competitive equilibria in differential information economies," Studies in Economic Theory, in: Dionysius Glycopantis & Nicholas C. Yannelis (ed.), Differential Information Economies, pages 185-201, Springer.
    5. Gul, Faruk & Postlewaite, Andrew, 1992. "Asymptotic Efficiency in Large Exchange Economies with Asymmetric Information," Econometrica, Econometric Society, vol. 60(6), pages 1273-1292, November.
    6. Richard McLean & Andrew Postlewaite, 2002. "Informational Size and Incentive Compatibility," Econometrica, Econometric Society, vol. 70(6), pages 2421-2453, November.
    7. McLean, Richard P. & Postlewaite, Andrew, 2003. "Informational size, incentive compatibility, and the core of a game with incomplete information," Games and Economic Behavior, Elsevier, vol. 45(1), pages 222-241, October.
    8. repec:dau:papers:123456789/5451 is not listed on IDEAS
    9. Ezra Einy & Diego Moreno & Benyamin Shitovitz, 2005. "Competitive and core allocations in large economies with differential information," Studies in Economic Theory, in: Dionysius Glycopantis & Nicholas C. Yannelis (ed.), Differential Information Economies, pages 173-183, Springer.
    10. Francoise Forges & Jean-Francois Mertens & Rajiv Vohra, 2002. "The Ex Ante Incentive Compatible Core in the Absence of Wealth Effects," Econometrica, Econometric Society, vol. 70(5), pages 1865-1892, September.
    11. Volij, Oscar & Serano, Roberto & Vohra, Rajiv, 2001. "On the Failure of Core Convergence," Staff General Research Papers Archive 5098, Iowa State University, Department of Economics.
    12. repec:dau:papers:123456789/5454 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Yusuke Kamishiro & Roberto Serrano, 2009. "Equilibrium Blocking in Large Quasilinear Economies," Working Papers wp2009_0911, CEMFI.
    2. Sun, Yeneng & Wu, Lei & Yannelis, Nicholas C., 2012. "Existence, incentive compatibility and efficiency of the rational expectations equilibrium," Games and Economic Behavior, Elsevier, vol. 76(1), pages 329-339.
    3. de Clippel, Geoffroy, 2007. "The type-agent core for exchange economies with asymmetric information," Journal of Economic Theory, Elsevier, vol. 135(1), pages 144-158, July.
    4. Wei He & Nicholas C. Yannelis, 2013. "A New Perspective on Rational Expectations," Economics Discussion Paper Series 1317, Economics, The University of Manchester.
    5. Sun, Yeneng & Zhang, Yongchao, 2009. "Individual risk and Lebesgue extension without aggregate uncertainty," Journal of Economic Theory, Elsevier, vol. 144(1), pages 432-443, January.
    6. Qiao, Lei & Yu, Haomiao, 2014. "On the space of players in idealized limit games," Journal of Economic Theory, Elsevier, vol. 153(C), pages 177-190.
    7. Khan, M. Ali & Qiao, Lei & Rath, Kali P. & Sun, Yeneng, 2020. "Modeling large societies: Why countable additivity is necessary," Journal of Economic Theory, Elsevier, vol. 189(C).
    8. Wu, Bin, 2022. "On pure-strategy Nash equilibria in large games," Games and Economic Behavior, Elsevier, vol. 132(C), pages 305-315.
    9. Qiao, Lei & Yu, Haomiao & Zhang, Zhixiang, 2016. "On the closed-graph property of the Nash equilibrium correspondence in a large game: A complete characterization," Games and Economic Behavior, Elsevier, vol. 99(C), pages 89-98.
    10. Lei Qiao & Yeneng Sun & Zhixiang Zhang, 2016. "Conditional exact law of large numbers and asymmetric information economies with aggregate uncertainty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 62(1), pages 43-64, June.
    11. Yusuke Kamishiro & Roberto Serrano, 2011. "Equilibrium Blocking in Large Quasilinear Economies," Mathematics of Operations Research, INFORMS, vol. 36(3), pages 552-567, August.
    12. Sun, Yeneng & Yannelis, Nicholas C., 2007. "Core, equilibria and incentives in large asymmetric information economies," Games and Economic Behavior, Elsevier, vol. 61(1), pages 131-155, October.
    13. Huang, Xuesong, 2021. "Incentive compatible self-fulfilling mechanisms and rational expectations," Games and Economic Behavior, Elsevier, vol. 126(C), pages 100-135.
    14. Sun, Xiang & Sun, Yeneng & Wu, Lei & Yannelis, Nicholas C., 2017. "Equilibria and incentives in private information economies," Journal of Economic Theory, Elsevier, vol. 169(C), pages 474-488.
    15. Yeneng Sun & Lei Wu & Nicholas C. Yannelis, 2011. "Existence, Incentive Compatibility and Efficiency of the Rational Expectations Equilibrium," Economics Discussion Paper Series 1108, Economics, The University of Manchester.
    16. Jianguo Chen, 2023. "The equilibrium of the bargaining game and core convergence theorem on an exchange economy with limited traders," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 83-99, January.
    17. He, Wei & Sun, Xiang & Sun, Yeneng, 2017. "Modeling infinitely many agents," Theoretical Economics, Econometric Society, vol. 12(2), May.

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    More about this item

    Keywords

    Core; Asymmetric Information; Incentive Compatibility; Exchange Economy;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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