Natural implementation with semi-responsible agents in pure exchange economies

Research, Article, External research report English OPEN
LOMBARDI, Michele ; YOSHIHARA, Naoki (2016)
  • Publisher: Hitotsubashi Institute for Advanced Study, Hitotsubashi University
  • Related identifiers: doi: 10.1007/s00182-017-0568-8
  • Subject: exchange economies | price-quantity mechanism | boundary problem | intrinsic preferences for responsibility, | Nash equilibrium | C72 | D71
    • ddc: ddc:330

We study Nash implementation by natural price-quantity mechanisms in pure exchange economies when agents have intrinsic preferences for responsibility. An agent has an intrinsic preference for responsibility if she cares about truth-telling that is in line with the goal of the mechanism designer besides her material well-being. A semi-responsible agent is an agent who, given what her opponents do, acts in an irresponsible manner when a responsible behavior poses obstacles to her material well-being. The class of efficient allocation rules that are Nash implementable is identified provided that there is at least one agent who is semi-responsible. The Walrasian rule is shown to belong to that class.
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