The Fundamentals of Monotone Processes Reviewed Through an Inefficiency Measure
The goal of any allocation mechanism is to improve the initial situation given by the endowments of the agents. For classical convex economies with price systems, the competitive process looks to be the best such mechanism. Indeed, from the New-Welfare Theorems of Arrow, Debreu, and Koopmans, we know that it achieves Pareto-efficient allocations. It is also well-known that the competitive mechanism is individually rational, i.e., the competitive equilibrium makes the position of each individual at least as good as his initial endowment (see, for instance, the nice book of Hildenbrand and Kirman [1976], where it is shown that the competitive equilibria belong to the core of the economy). Furthermore, the competitive mechanism is uniquely informationally efficient
- DOI
- 10.2307/2118379
- Volume
- 107 (3)
- Pages
- 1125-1136
- Language
- en
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