Endowments, Exclusion, and Exchange
46 Pages Posted: 6 Jun 2017 Last revised: 14 Sep 2017
Date Written: September 2, 2017
We propose a new cooperative solution for discrete exchange economies and resource allocation problems, the exclusion core. The exclusion core is neither weaker nor stronger than the (strong) core and it rests upon a foundational idea in the legal understanding of property, the right to exclude others. By reinterpreting endowments as a distribution of exclusion rights, we can extend our analysis to economies with qualified property rights and social hierarchies. The exclusion core characterizes a generalized top trading cycle algorithm in a large class of economies, including those featuring private and public ownership.
Keywords: Exchange Economy, Property Rights, Core, Top Trading Cycles, House Exchange
JEL Classification: C71, D47, K11
Suggested Citation: Suggested Citation