Endowments, Exclusion, and Exchange

46 Pages Posted: 6 Jun 2017 Last revised: 14 Sep 2017

Ivan Balbuzanov

The University of Melbourne - Department of Economics

Maciej H. Kotowski

Harvard University - Harvard Kennedy School (HKS)

Date Written: September 2, 2017

Abstract

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

Balbuzanov, Ivan and Kotowski, Maciej H., Endowments, Exclusion, and Exchange (September 2, 2017). HKS Working Paper No. RWP17-016. Available at SSRN: https://ssrn.com/abstract=2943015 or http://dx.doi.org/10.2139/ssrn.2943015

Ivan Balbuzanov

The University of Melbourne - Department of Economics ( email )

Level 4 111 Barry Street
The University of Melbourne, VIC 3010
Australia

HOME PAGE: http://fbe.unimelb.edu.au/economics

Maciej H. Kotowski (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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