HIAS GLECS

HIAS-E-48

Natural Implementation with Semi-Responsible Agents in Pure Exchange Economies

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.

Report No.: HIAS-E-48
Author(s): Michele Lombardi(a)
Naoki Yoshihara(b), (c), (d)
Affiliation: (a) Adam Smith Business School, University of Glasgow, Glasgow, G12 8QQ, United Kingdom
(b) Department of Economics, University of Massachusetts Amherst, Crotty Hall, 412 North Pleasant Street, Amherst, MA 01002, USA
(c) The Institute of Economics Research, Hitotsubashi University, 2-1, Naka, Kunitachi, Tokyo 186-8601 Japan
(d) School of Management, Kochi University of Technology, Tosayamada, Kami-chity, Kochi 782-8501, Japan
Issued Date: December 2016
Keywords: Nash equilibrium, exchange economies, intrinsic preferences for responsibil- ity, boundary problem, price-quantity mechanism
JEL: C72, D71
Links: PDF, HERMES-IR, RePEc