Summary
This paper provides a general way to incorporate private ownership production economies into the implementation of the Walrasian correspondence. We present two mechanisms, both of which permit agents to behave strategically with respect to their initial endowments, preferences, and production possibility sets. The first mechanism deals with the case of endowment destruction, the second deals with the case of endowment withholding. We show that each mechanism Nash implements the Walrasian correspondence. In addition, both mechanisms are individually feasible, balanced, continuous and only require the transmission of prices and quantities of goods as messages.
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This paper is based on Chapters 2 and 3 of my dissertation submitted to the University of Minnesota. I want to thank E. Green, J. Jordan, M. Richter, H. Weinberger and especially L. Hurwicz for their many helpful suggestions and comments.
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Hong, L. Nash implementation in production economies. Econ Theory 5, 401–417 (1995). https://doi.org/10.1007/BF01212326
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DOI: https://doi.org/10.1007/BF01212326