Nash Equilibrium and Welfare Optimality

Maskin, Eric

doi:10.1111/1467-937x.00076

Cited by 923 publications

(770 citation statements)

References 21 publications

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“…Secondly, if we look for positive st st results, we have to allow for state-dependent utility functions. The condition of Maskin Monotonicity (Maskin, 1977) is necessary and, under our assumptions, sufficient for Nash implementability with three or more agents. As Maskin himself notes the well-known strict Spence-Mirrlees single-crossing property is a sufficient condition for Maskin monotonicity to be satisfied.…”

Section: F(s) 5 F(t) ; St [mentioning

confidence: 88%

Contingent commodities and implementation

Chattopadhyay

Corchón

Naeve³

2000

Economics Letters

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In this note we study the relevance of using contingent commodity allocations when states are not directly contractible. In such a setting, a contingent commodity allocation takes the form of a social choice function, and the question is whether this function is implementable. Using only very mild assumptions on the rule for selecting contingent commodity allocations, we derive a strong negative result which proves to be robust with respect to different solution concepts employed for implementation. These findings have interesting implications for the interpretation of Arrow-Debreu economies.

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Section: F(s) 5 F(t) ; St [mentioning

confidence: 88%

Contingent commodities and implementation

Chattopadhyay

Corchón

Naeve³

2000

Economics Letters

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“…In principle, since parties are symmetrically informed about the firm's reorganization value, the contract could include a revelation game (Maskin 1999) of the following sort. The parties separately report the state of nature.…”

Section: The Case With One Creditormentioning

confidence: 99%

Contractual Resolutions of Financial Distress

Gennaioli

Rossi

2009

SSRN Journal

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In a financial contracting model we study the optimal debt structure to resolve financial distress. We show that a debt structure where two distinct debt classes co-exist − one class fully concentrated and with control rights upon default, the other dispersed and without control rights − removes the controlling creditor's liquidation bias when investor protection is strong. These results rationalize the use and the performance of floating charge financing, debt financing where the controlling creditor takes the entire business as collateral, in countries with strong investor protection. More broadly, our theory predicts that the efficiency of contractual resolutions of financial distress should increase with investor protection.JEL classification: G33, K22.

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“…First, remember that the Walrasian correspondence is implementable in Nash equilibrium over a class of economies in which Walrasian allocations are always interior. We feel legitimate to make the game stops at stage 1 if allocations are in the interior of the feasible set 11 . If, given a price p 2 P , an interior allocation is not Walrasian, at least one agent would like to obtain a di¤erent feasible bundle at that price.…”

Section: Taking Care Of the Boundary Problemmentioning

confidence: 99%

“…Maskin monotonicity (Maskin (1999)) is a necessary condition for implementation of social choice correspondences in Nash Equilibrium. This condition has been shown to be restrictive in some cases.…”

Section: Introductionmentioning

confidence: 99%

Subgame Perfect Implementation and the Walrasian Correspondence

Bochet

2003

SSRN Journal

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Consider a class of exchange economies in which preferences are continuous, convex and strongly monotonic. It is well known that the Walrasian correspondence, de…ned over such a class of economies, is not implementable in Nash Equilibrium. Monotonicity (Maskin (1999)), a necessary condition for Nash implementation, is violated for allocations at the boundary of the feasible set. However, we know since the seminal work of Moore-Repullo (1988) and Abreu-Sen (1990) that monotonicity is no longer necessary for subgame perfect implementation. We …rst show that the Walrasian correspondence de…ned over this class of exchange economies is not implementable in subgame perfect equilibrium. Indeed, the assumption of di¤erentiability cannot be relaxed unless one imposes parametric restrictions on the environment, like assumption EE.3 in Moore-Repullo (1988).Next, assuming di¤erentiability, we construct a sequential mechanism that fully implements the Walrasian correspondence in subgame perfect and strong subgame perfect equilibrium.. We take care of the boundary problem that was prominent in the Nash implementation literature. Moreover, our mechanism is based on price-allocation announcements and …ts the very description of Walrasian Equilibrium.Keywords: Walrasian equilibrium, double implementation, subgame perfect equilibrium, strong subgame perfect equilibrium. This paper is partially based on chapter 2 of my Phd thesis completed at Brown University. I thank Francois Maniquet, Roberto Serrano and Rajiv Vohra for helpful discussions and comments on this topic. I also thank William Thomson for some very helpful comments on a previous draft of this paper. contact: olivier.bochet@fundp.ac.be y University of Namur and CORE.

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Nash Equilibrium and Welfare Optimality

Cited by 923 publications

References 21 publications

Contingent commodities and implementation

Contingent commodities and implementation

Contractual Resolutions of Financial Distress

Subgame Perfect Implementation and the Walrasian Correspondence

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