This paper defines a new concept of the core for an economy with transaction costs, and uses this concept to prove a limit theorem for sequences of replica economies. In this way it provides a rationale for a definition of equilibrium in which agents face a sequence of budget constraints. Since economies with incomplete markets are special cases of economies with transaction costs, the limit theorem also provides a rationale for Radner's equilibrium of plans, prices, and price expectations.

This paper shows that if a social choice rule can be implemented in dominant strategies by an indirect mechanism, but there does not exist a direct mechanism that implements it in dominant strategies, then it must be the case that the original indirect mechanism does not implement the social choice rule in Nash strategies (under complete information) or in Bayesian strategies (under imcomplete information).

Journal Article A Note on Imperfect Information and Optimal Pollution Control Get access Rafael Repullo Rafael Repullo London School of Economics Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 49, Issue 3, July 1982, Pages 483–484, https://doi.org/10.2307/2297372 Published: 01 July 1982