In this paper, we revisit a longstanding question on the structure of strategy‐proof and Pareto‐efficient social choice functions (SCFs) in classical exchange economies (Hurwicz 1972). Using techniques developed by Myerson in the context of auction design, we show that in a specific quasilinear domain, every Pareto‐efficient and strategy‐proof SCF that satisfies non‐bossiness and a mild continuity property is dictatorial. The result holds for an arbitrary number of agents, but the two‐person version does not require either the non‐bossiness or the continuity assumptions. It also follows that the dictatorship conclusion holds on any superset of this domain. We also provide a minimum consumption guarantee result in the spirit of Serizawa and Weymark (2003).

We study two-player common-value all-pay auctions in which the players have ex-ante asymmetric information represented by …nite partitions of the set of possible values of winning. We consider two families of such auctions: in the …rst, one of the players has an information advantage (henceforth, IA) over his opponent, and in the second, no player has an IA over his opponent. We show that there exists a unique equilibrium in auctions with IA and explicitly characterize it; for auctions without IA we …nd a su¢ cient condition for the existence of equilibrium in monotonic strategies. We further show that, with or without IA, the ex-ante distribution of equilibrium e¤ort is the same for every player (and hence the players' expected e¤orts are equal), although their expected payo¤s are di¤erent. In auctions with IA, the players have the same ex-ante probability of winning, which is not the case in auctions without IA.

This paper defines the single-crossing property for two-agent, two-good exchange economies for classical (i.e., continuous, strictly monotonic, and strictly convex) individual preferences. Within this framework and on a rich single-crossing domain, the paper characterizes the family of continuous, strategy-proof and individually rational social choice functions whose range belongs to the interior of the set of feasible allocations. This family is shown to be the class of generalized trading rules. This result highlights the importance of the concavification argument in the characterization of fixed-price trading rules provided by Barberà and Jackson (1995), an argument that does not hold under single-crossing. The paper also shows how several features of abstract single-crossing domains, such as the existence of an ordering over the set of preference relations, can be derived endogenously in economic environments by exploiting the additional structure of classical preferences.

No abstract

No abstract