Research and Publications

Somalia is suffering a severe famine, but by using the existing social structure and an understanding of Somali culture, international relief organizations can manage to successfully distribute food. In addition, the system used for food distribution can help to rebuild political structures that were torn apart by the ouster of Mohamed Siad Barre and the civil war that ensued. -Authors

The purpose of this paper is to establish a new upper bound on the size of the strategy space that is needed to feasibly implement the constrained Walrasian correspondence (W). This bound is significantly lower than those available from the literature on feasible Nash-implementation. Our focus on W has wider implications since implementation of W implies partial implementation of "almost" all individually rational and efficient implementable economic performance standards. Hence, our results provide a parallel - in the economic context - to the research agenda of Saijo [13] and McKelvey [9] who have established new upper bounds on the size of the strategy space required for feasible implementation of Nash-implementable performance standards in general social choice contexts. We prove that it is sufficient to have only three agents in an economy who make price-related announcements. This is a critical source of the reduction in strategy space. © 1991 Spring-Verlag.

A public good is produced by a firm using a private good owned by potential consumers. The firm's technology and the consumers' preferences are unobservable to the Central Planning Board (CPB). The CPB's objective is to design a planning procedure that (a) converges to a Pareto-efficient and individually rational allocation and (b) taxes each consumer in proportion to his/her true marginal benefits and re-distributes the dividend generated in proportion to the taxes he/she pays. We refer to such a division of the tax burden and the dividend as the proportional division rule. Given the simultaneous requirements of (a) and (b), there is a crucial incentive problem to be resolved. We show the existence of a planning procedure that retains the convergence properties and implements the proportional rule in myopic Nash equilibrium. © 1991.

A mechanism realizes an objective if, when agents are honest, the objective is met when the mechanism is used. A mechanism implements an objective if, when agents act strategically, the objective is met when the mechanism is used. This paper addresses the question: do we incur an 'informational cost', in terms of increased communication requirements, when we insist on implementation of the (constrained) Walrasian correspondence as opposed to, simply, its realization? Communication requirements of a mechanism are measured by the size of its message space. We prove the existence of a mechanism that implements the (constrained) Walrasian correspondence with a message space which is no larger than that of the competitive allocation mechanism. We explore implementation with quasi-games which generalize games in the sense that they have outcome correspondences. Since a quasi-game designer is free to specify a set of outcomes rather than a single outcome for each strategy profile, a smaller amount of information needs to be conveyed to the center. We prove our result using a quasi-game whose solution is well-defined and invariant with respect to alternative beliefs held by agents about selections from the set of out-of-equilibrium outcomes. © 1990.