Efficient Strategy-Proof Exchange
and Minimum Consumption Guarantees
Working Paper No. 02-W16R
Shigehiro Serizawa and John A. Weymark
ABSTRACT [article]
For exchange economies with classical economic preferences, it is shown that any strategy-proof social choice function that selects Pareto optimal outcomes cannot guarantee everyone a consumption bundle bounded away from the
origin. This result demonstrates that there is a fundamental conflict between efficiency and distributional goals in exchange economies if the social choice rule is required to be strategy-proof.
Keywords and Phrases: social choice, strategy-proofness, exchange economies
JEL Classification Number: D71