Econometrica: May, 1971, Volume 39, Issue 3

A Convergent Pareto-Satisfactory Non-Tatonnement Adjustment Process for a Class of Unselfish Exchange Environments

https://doi.org/0012-9682(197105)39:3<467:ACPNAP>2.0.CO;2-5
p. 467-499

John O. Ledyard

The paper is partitioned into two parts. The first contains a description of an "economic system" which allocates resources in exchange environments when consumer preferences are not selfish. This section also contains the conditions under which this economic system allocates resources optimally. The second part utilizes the allocation process described above, as well as four variants, to examine the concepts, and formal definitions, of informational decentralization and efficiency found in Hurwicz [8]. It is shown that various types of trade-offs exist between optimality in resource allocation and informational decentralization.