Implementation of marginal cost pricing equilibrium allocations with transfers in economies with increasing returns to scale |
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Authors: | Guoqiang Tian |
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Institution: | 1. Department of Economics, Texas A&M University, College Station, TX, 77843, USA 2. School of Economics, Shanghai University of Finance and Economics, 200433, Shanghai, China
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Abstract: | This paper considers implementation of marginal cost pricing equilibrium allocations with transfers for production economies with increasing returns to scale. We present a mechanism whose Nash equilibrium allocations coincide with the set of marginal cost pricing equilibrium allocations with transfers that characterizes Pareto efficient allocations for economies with non-convex production technologies. We allow production sets and preferences to be unknown to the planner. The mechanism has some nice properties such as feasibility, continuity, and finite-dimension of message space. Furthermore, it works not only for three or more agents, but also for two-agent economies. |
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