No abstract provided.

The problem of eliciting honest preferences from individuals who must be assigned to a set of positions is considered. Individuals know that they will be charged for the positions to which they are assigned. A set of prices that provide no incentive for the individual to misrepresent his preferences is suggested. It is shown that these prices constitute an element of the optimal solution to the dual of a linear programming assignment problem. Both the optimal allocation and the prices to be charged can be derived by solving two linear programming problems once preferences have been elicited. The procedure can usefully be viewed as a simulation of a competitive market under conditions where such a market cannot be expected to function well. It results in an efficient allocation where all resources are valued at their opportunity costs and "consumer surplus" is maximized; its outcome thus has the desirable properties of competitive market equilibria.

The problem of eliciting honest preferences from individuals who must be assigned to a set of positions is considered. Individuals know that they will be charged for the positions to which they are assigned. A set of prices that provide no incentive for the individual to misrepresent his preferences is suggested. It is shown that these prices constitute an element of the optimal solution to the dual of a linear programming assignment problem. Both the optimal allocation and the prices to be charged can be derived by solving two linear programming problems once preferences have been elicited. The procedure can usefully be viewed as a simulation of a competitive market under conditions where such a market cannot be expected to function well. It results in an efficient allocation where all resources are valued at their opportunity costs and "consumer surplus" is maximized; its outcome thus has the desirable properties of competitive market equilibria.

[When a principal with private information designs a mechanism to coordinate his subordinates, he faces a dilemma: to conceal his information, his selection of mechanism must not depend on his information; but his information may influence which mechanism he prefers. To resolve this dilemma, this paper develops a theory of inscrutable mechanism selection. The principal's neutral optima are defined as the smallest possible set of unblocked mechanisms. They are shown to exist and are characterized using parametric linear programs. Any safe and undominated mechanism is a neutral optimum. Any neutral optimum is an expectional equilibrium and a core mechanism.]

We compare six concepts of efficiency for economies with incomplete information, depending on the stage at which individuals' welfare is evaluated and on whether incentive constraints are recognized. An example is shown in which an incentive-efficient decision rule may be unanimously rejected by the individuals in the economy. We define durable decision rules, which can resist such unanimous rejection, and show that efficient durable decision rules exist.

[This paper characterizes a market economy with infinitely long-lived consumers, and value-maximizing firms which face costs of adjustment for capital. The temporary equilibrium of this economy is similar to the short-run equilibrium of standard macroeconomic models. Consumption is a function of wealth, investment is related to the value of firms; equilibrium between aggregate demand and aggregate supply is achieved by the endogenous adjustment of the sequence of current and future interest rates. The dynamic behavior of output, consumption, and investment in this economy is the same as in an optimal growth model with adjustment costs. The paper shows this equivalence and then uses it, together with the equivalence of taxes to technological shocks, to study the dynamic effects of fiscal policy.]