An effectivity function describes the blocking power of coalitions on subsets of alternatives. Given a preference profile, if any coalition blocks an alternative whenever it can, using its own power, make all of its members better off, only alternatives in the core can be reached. In this paper we study the incentives of the coalitions to use this power truthfully, i.e. to not manipulate. Some well known cores, among them the core of an exchange economy, are manipulable. We give sufficient conditions on an effectivity function that assure its core is nonmanipulable.

This paper proposes a procedure for implementing efficient egalitarian equivalent allocations in an exchange economy, using the perfect equilibrium concept. This procedure is an extension of the divide and choose method in two ways: it is defined for more than two agents and the divider's advantage is removed by auctioning the role of divider among the agents (as in Crawford [1]).Thus, in contrast with other equilibrium concepts (Nash, dominant), the perfect one solves the efficiency-justice dilemma.

We study two-sided in which agents are buyers and sellers or firms and workers or men and women. The agents are to form partnerships (which provide them with satisfaction) and at the same time make monetary transfers (e.g. salaries or dowries). The core of this market game is shown to have a particularly nice structure so that precise answers can be given to questions concerning comparative statics and manipulability. THE IDEA OF USING Walrasian equilibrium as a mechanism for making allocations with desirable properties of fairness and efficiency has been studied extensively. The scheme involves having agents specify their supply and demand functions. The competitive equilibria are then calculated and allocations are made accordingly. In general this procedure may run into two difficulties: first, nonuniqueness-if there are several equilibria there may be no fair way to decide which one should be implemented; and second, manipulability-if there is only one equilibrium an informed agent may be able to influence it by suitably falsifying his demand data. However, as we will show here, using the Walrasian mechanism does work remarkably well for a certain class of important markets. These are the matching markets of our title and they include for single items, like houses, where it is assumed that traders do not wish to acquire more than one item. They also include labor in which it is desired to match workers with jobs at suitable salaries, academic markets in which students are to be assigned to educational institutions, marriage markets where men and women are matched through negotiating of dowries. It turns out that in these both the problems of nonuniqueness and manipulability can be resolved in a

A set of n objects and an amount M of money is to be distributed among m people. Example: the objects are tasks and the money is compensation from a fixed budget. An elementary argument via constrained optimization shows that for M sufficiently large the set of efficient, envy free allocations is nonempty and has a nice structure. In particular, various criteria of justice lead to unique best fair allocations that are well behaved with respect to changes of M. This is in sharp contrast to the usual fair division theory with divisible goods. Copyright 1991 by The Econometric Society.

This paper examines the sharing of risks between generations in the framework of an overlapping generations model of social security with shocks to the productivity of labor and capital and demographic shocks. The study focused on stationary long run allocations. The concept of interim optimality was utilized, which amounts to standard Pareto optimality once the state of the world in which the agents are born is known. The set of interim optimal allocations was characterized and the equilibria associated with various institutional forms of social security from the point of view of the optimal criterion were also studied. In addition, the analogs of two traditional welfare theorems of microeconomic theory were obtained.