Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Sep, 1993, Volume 61, Issue 5

A Unique Informationally Efficient and Decentralized Mechanism with Fair Outcomes<1147:AUIEAD>2.0.CO;2-7
p. 1147-1172

Alan Kirman, Xavier Calsamiglia

It is shown that any informationally decentralized mechanism that realizes fair allocations over the class of classical pure exchange environments has a message space of dimension no smaller than the number of agents times the number of commodities. Since the equal income Walrasian mechanism, in which all agents take prices parametrically and maximize utility subject to the average income constraint, realizes fair outcomes over the class of classical pure exchange environments and has a message space of that dimension it is informationally efficient. Further, it is shown that it is the unique informationally efficient mechanism realizing fair allocations.

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