Econometrica: Mar 1982, Volume 50, Issue 2

Strategic Behavior in Decentralized Planning Procedures

https://doi.org/0012-9682(198203)50:2<325:SBIDPP>2.0.CO;2-X
p. 325-344

Guy Laroque, Paul Champsaur

Noncooperative strategic behaviors are studied in the Malinvaud-Dreze-de la Vallee Poussin decentralized planning procedure. We depart from the assumption of myopic behavior by assuming that every agent takes into account the effect over a given period of time [0, T] of his answers to the Center. One shows that, for T large, every Nash equilibrium of the ensuing game in intertemporal strategies approaches: (i) a competitive equilibrium in an exchange economy, and (ii) a Lindahl equilibrium in an economy with public goods. Thus, the Center loses any significant influence on the income distribution.

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