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Notes on optimality and feasibility of informationally decentralized allocation mechanisms by A. Postlewaite

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Published by College of Commerce and Business Administration, University of Illinois at Urbana-Champaign in [Urbana, Ill.] .
Written in English

Subjects:

  • Social choice,
  • Equilibrium (Economics),
  • Game theory

Book details:

Edition Notes

StatementAndrew Postlewaite ... David Schmeidler ...
SeriesFaculty working papers -- no. 583, Faculty working papers -- no. 583.
ContributionsSchmeidler, David, 1939- joint author, University of Illinois at Urbana-Champaign. College of Commerce and Business Administration
The Physical Object
Pagination[i], 27 p. :
Number of Pages27
ID Numbers
Open LibraryOL24776469M
OCLC/WorldCa5580571

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Notes on optimality and feasibility of informationally decentralized allocation mechanisms / BEBR No. By A. Postlewaite and David Schmeidler. Get PDF (2 MB) Abstract. Title page includes summary of paper."This work was supported by Grant #SOC from the National Science Foundation."Includes bibliographical references (p. ) Author: A. Postlewaite and David Schmeidler. Andrew Postlewaite and David Schmeidler, Notes on optimality and feasibility of informationally decentralized mechanisms, in O. Moeschlin and D. Pallaschke (eds.), Game Theory and Related Topics (pp. ), North-Holland, Amsterdam, David Schmeidler, Economic analysis via strategic outcome functions: A survey of in. Downloadable! 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 Cited by: It is shown that the distributive Lindahl mechanism has a minimal informational size of the message space, and thus it is informationally the most efficient allocation process that is informationally decentralized and realizes Pareto‐efficient allocations over the class of economies that include nonmalevolent economies.

Designing such mechanisms would of course be a trivial matter if the optimality of the resulting allocations were the only performance requirement. But as may be seen from the early debates over the feasibility of central planning in socialist economies, there are other important characteristics of mechanisms that also need to be taken into account. This paper investigates the dimension requirements of informationally decentralized Pareto-satisfactory processes in production economies with increasing returns to scale or more general types of non-convexities. We show that the marginal cost pricing (MCP) mechanism is informationally effcient over the class of non-convex production economies where MCP equilibrium allocations are Pareto . A MODEL OF INTERTEMPORAL RESOURCE ALLOCATION Some of the central questions on designing a resource allocation mechanism that is informationally decentralized over time can be discussed formally in the context of a standard one-good model. Price/ market mechanism which manipulates the allocation of resources or tries to resolve the three fundamental questions of what, how and for whom to produce. In other words, resources are allocated through changes in relative prices.

Ch. Incentive Aspects of Decentralization To present these results more formally, it is convenient to switch to a model of public decision-making which subsumes the inputs (costs) of producing a public good under the more general rubric of a public decision (project). 5° Formally, this reduces the problem to that of a "costless" project, but at the expense of increasing the dimensionality . In this paper we present a new improved design for multi-object auctions and report on the results of experimental tests of that design. We merge the better features of two extant but very di#erent auction processes, the Simultaneous Multiple Round (SMR) design used by the FCC to auction spectrum and the Adaptive User Selection Mechanism (AUSM) of Banks, Ledyard, and Porter (). GAME THEORY AND RELATED TOPICS O. Moeschlin. D. Pallaschke (eds.) C> North-Holland Publishing Company, NOTES ON OPTIMALITY AND FEASIBILITY OF INFORMATIONALLY * DECENTRALIZED ALLOCATION MECHANISMS Andrew Postlewaite Department of Economics University of Illinois at Urbana-Champaign II 'David Schmeidler Department of Economics Tel-Aviv. Summary. We discuss how decentralized network resource allocation problems fit within the context of mechanism design (realization theory and implementation theory), and how mechanism design can provide useful insight into the nature of decentralized network resource allocation problems.