Refinements and incentive efficiency in Walrasian models of insurance economies

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• 作者：Aless ; ro Citanna ; Paolo Siconolfi
• 关键词：Walrasian markets ; Adverse selection ; Refinements ; Mechanisms
• 刊名：Journal of Mathematical Economics
• 出版年：January, 2014
• 年：2014
• 卷：50
• 期：Complete
• 页码：208-218
• 全文大小：505 K

文摘

The literature on Walrasian markets in large economies with adverse selection has used various equilibrium refinements, but has obtained no general incentive efficiency of equilibrium, namely when cross-subsidies are needed for efficiency. We show that the same refined equilibria may also be incentive inefficient even when general mechanisms that allow for such cross-subsidies are priced and can be traded. In the process, we also prove existence of some type of forward induction equilibria in this context.