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Information transmission and core convergence in quasilinear economies

Author

Listed:
  • Yusuke Kamishiro

    (Brown University)

  • Roberto Serrano

    (Brown University and IMDEA Social Sciences)

Abstract
We study core convergence in interim quasilinear economies with asymmetric information, concentrating on core notions in which information is transmitted endogenously within coalitions and the incentive constraints are relevant. Specifically, we shall focus on the credible core and randomized mediated core concepts. We consider independent replicas of the basic economy: independent copies of the economy in which each individual's utility only depends on the information of the individuals who belong to the same copy. We provide an example in which core convergence does not obtain for the Dutta-Vohra credible core and for Myerson's randomized mediated core. On the other hand, we establish a positive convergence result for a refinement of Myerson's core for which information disseminates across coalitions within a given random blocking mechanism. Under some conditions, this core converges to the set of incentive compatible ex-post Walrasian allocations.

Suggested Citation

  • Yusuke Kamishiro & Roberto Serrano, 2008. "Information transmission and core convergence in quasilinear economies," Working Papers 2008-01, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    • Handle: RePEc:imd:wpaper:wp2008-01
    as

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    References listed on IDEAS

    as
    1. Serrano, Roberto & Vohra, Rajiv, 2007. "Information transmission in coalitional voting games," Journal of Economic Theory, Elsevier, vol. 134(1), pages 117-137, May.
    2. Qin Cheng-Zhong, 1993. "The Inner Core and the Strictly Inhibitive Set," Journal of Economic Theory, Elsevier, vol. 59(1), pages 96-106, February.
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    4. Roberto Serrano & Rajiv Vohra & Oscar Volij, 2001. "On the Failure of Core Convergence in Economies with Asymmetric Information," Econometrica, Econometric Society, vol. 69(6), pages 1685-1696, November.
    5. de Clippel, Geoffroy & Minelli, Enrico, 2005. "Two remarks on the inner core," Games and Economic Behavior, Elsevier, vol. 50(2), pages 143-154, February.
    6. de Clippel, Geoffroy, 2007. "The type-agent core for exchange economies with asymmetric information," Journal of Economic Theory, Elsevier, vol. 135(1), pages 144-158, July.
    7. Françoise Forges & Aviad Heifetz & Enrico Minelli, 2005. "Incentive compatible core and competitive equilibria in differential information economies," Studies in Economic Theory, in: Dionysius Glycopantis & Nicholas C. Yannelis (ed.), Differential Information Economies, pages 185-201, Springer.
    8. Einy, Ezra & Moreno, Diego & Shitovitz, Benyamin, 2000. "Rational expectations equilibria and the ex-post core of an economy with asymmetric information," Journal of Mathematical Economics, Elsevier, vol. 34(4), pages 527-535, December.
    9. Gerard Debreu, 1963. "On a Theorem of Scarf," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(3), pages 177-180.
    10. Vohra, Rajiv, 1999. "Incomplete Information, Incentive Compatibility, and the Core," Journal of Economic Theory, Elsevier, vol. 86(1), pages 123-147, May.
    11. Gul, Faruk & Postlewaite, Andrew, 1992. "Asymptotic Efficiency in Large Exchange Economies with Asymmetric Information," Econometrica, Econometric Society, vol. 60(6), pages 1273-1292, November.
    12. Francoise Forges & Jean-Francois Mertens & Rajiv Vohra, 2002. "The Ex Ante Incentive Compatible Core in the Absence of Wealth Effects," Econometrica, Econometric Society, vol. 70(5), pages 1865-1892, September.
    13. Myerson, Roger B., 2007. "Virtual utility and the core for games with incomplete information," Journal of Economic Theory, Elsevier, vol. 136(1), pages 260-285, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    core convergence; information transmission; coalitional voting mechanisms; mediation; rational expectations equilibrium;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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