Natural implementation with semi-responsible agents in pure exchange economies

Original Paper

Abstract

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.

Keywords

Nash equilibrium Exchange economies Intrinsic preferences for responsibility Boundary problem Price–quantity mechanism 

JEL Classification

C72 D71 

Copyright information

© Springer-Verlag Berlin Heidelberg 2017

Authors and Affiliations

  1. 1.Adam Smith Business SchoolUniversity of GlasgowGlasgowUK
  2. 2.Department of EconomicsUniversity of Massachusetts AmherstAmherstUSA
  3. 3.The Institute of Economic ResearchHitotsubashi UniversityKunitachiJapan
  4. 4.School of ManagementKochi University of TechnologyKochiJapan

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