Natural implementation with partially-honest agents in economic environments with free-disposal

Authors

Michele Lombardi, University of GlasgowFollow
Naoki Yoshihara, The Institute of Economic Research, Hitotsubashi UniversityFollow

Working Paper Number

2014-09

Publication Date

2014

Abstract

We study Nash implementation by natural price-quantity mechanisms in pure exchange economies with free-disposal (Saijo et al., 1996, 1999) where agents have weak/strong intrinsic preferences for honesty (Dutta and Sen, 2012). Firstly, the Walrasian rule is shown to be non-implementable where all agents have weak (but not strong) intrinsic preferences for honesty. Secondly, the class of efficient allocation rules that are implementable is identified provided that at least one agent has strong intrinsic preferences for honesty. Lastly, the Walrasian rule is shown to belong to that class.

DOI

https://doi.org/10.7275/6356180

Recommended Citation

Lombardi, Michele and Yoshihara, Naoki, "Natural implementation with partially-honest agents in economic environments with free-disposal" (2014). Economics Department Working Paper Series. 175.
https://doi.org/10.7275/6356180