Communication complexity and stability of equilibria in economies and games

James Schuyler Jordan

Research output: Contribution to journalArticlepeer-review

Abstract

The theory of decentralized allocation mechanisms introduced by Leonid Hurwicz enabled economists to analyze the implications of requiring an allocation mechanism to perform well over a range of possible economic environments. One of the earliest major results in this theory was the formalization and proof of Hayek's famous assertion that the competitive market mechanism minimizes the communication needed to achieve Pareto efficient allocations. The informational efficiency theorem spawned a large literature on communication complexity in allocation mechanisms. This paper provides an exposition of some results on the communication required to make equilibria locally stable, and the possibility of eliciting the required communication in allocation mechanisms and games.

Original languageEnglish (US)
Pages (from-to)115-135
Number of pages21
JournalReview of Economic Design
Volume13
Issue number1-2
DOIs
StatePublished - Apr 1 2009

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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