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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Foundations of pseudomarkets : walrasian equilibria for discrete resources
Organization Unit
  • Antonio Miralles
  • Marek Pycia
  • English
Institution CEPR
Series Name Discussion Paper Series
Number DP15161
ISSN 0265-8003
Number of Pages 31
Date 2020
Abstract Text We study the assignment of objects in environments without transfers allowing for single-unit and general multi-unit demands, and any linear constraints, thus covering a wide range of applied environments, from school choice to course allocation. We establish the Second Welfare Theorem for these environments despite them failing the local non-satiation condition that previous studies of the Second Welfare Theorem relied on. We also prove a strong version of the First Welfare Theorem. We thus show that the link between efficiency and decentralization through prices is valid in environments without transfers, and hence provide a foundation for pseudomarket- based market design by showing that the restriction to such mechanisms is without loss of generality.
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