Rights and Decentralized Computation
Lund University - Department of Economics
Metroeconomica, Vol. 55, No. 2-3, pp. 290-317, May 2004
This paper emphasizes that rights facilitate decentralized use of information and computation. A dynamically efficient adjustment process that solves a private information linear resource allocation problem by a sequential auction of production and trading rights is presented. It is shown that in equilibrium the sequential auction mimics the simplex algorithm in a decentralized way and thereby gives it an institutional economic interpretation, where the structure of rights imposes restrictions on the problem sequentially.
Number of Pages in PDF File: 28Accepted Paper Series
Date posted: July 4, 2004
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