Information Transmission and Core Convergence in Quasilinear Economies

Brown Economics Working Paper No. 2008-05

27 Pages Posted: 8 Feb 2008

See all articles by Yusuke Kamishiro

Yusuke Kamishiro

Kanto Gakuin University - College of Economics

Roberto Serrano

Brown University

Date Written: January 2008

Abstract

We study core convergence in interim quasilinear economies with asymmetric information, concentrating on core notions in which information is transmitted endogenously within coalitions and the incentive constraints are relevant. Specifically, we shall focus on the credible core and randomized mediated core concepts. We consider independent replicas of the basic economy: independent copies of the economy in which each individual's utility only depends on the information of the individuals who belong to the same copy. We provide an example in which core convergence does not obtain for the Dutta-Vohra credible core and for Myerson's randomized mediated core. On the other hand, we establish a positive convergence result for a refinement of Myerson's core for which information disseminates across coalitions within a given random blocking mechanism. Under some conditions, this core converges to the set of incentive compatible ex-post Walrasian allocations.

Keywords: Core Convergence, Information Transmission, Coalitional Voting

JEL Classification: C71, C72, D51, D82

Suggested Citation

Kamishiro, Yusuke and Serrano, Roberto, Information Transmission and Core Convergence in Quasilinear Economies (January 2008). Brown Economics Working Paper No. 2008-05. Available at SSRN: https://ssrn.com/abstract=1090627 or http://dx.doi.org/10.2139/ssrn.1090627

Yusuke Kamishiro (Contact Author)

Kanto Gakuin University - College of Economics ( email )

1-50-1 Mutsuura-higashi
Kanazawa-ku
Yokohama, Kanagawa 236-8501
Japan

Roberto Serrano

Brown University ( email )

64 Waterman Street
Providence, RI 02912
United States
401-863-1036 (Phone)
401-863-1970 (Fax)

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