Two-sided allocation problems, decomposability, and the impossibility of efficient trade

A-Tier
Journal: Journal of Economic Theory
Year: 2019
Volume: 179
Issue: C
Pages: 416-454

Score contribution per author:

1.005 = (α=2.01 / 4 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Previous literature has shown that private information is a transaction cost that prevents efficient reallocation in two-sided setups with bilateral trade or homogeneous goods. We derive conditions under which the impossibility of efficient trade extends to rich environments in which buyers and sellers have multi-dimensional private types, accommodating many-to-many trades and heterogeneous objects. If agents can be decomposed into unit constituents, the allocation problem can be represented as an assignment game and impossibility obtains through a generalization of Shapley's (1962) result that buyers and sellers are complements. We introduce a general family of payoff functions that ensures decomposability and thus impossibility.

Technical Details

RePEc Handle
repec:eee:jetheo:v:179:y:2019:i:c:p:416-454
Journal Field
Theory
Author Count
4
Added to Database
2026-01-25