Endowments, Exclusion, and Exchange

45 Pages Posted: 6 Jun 2017 Last revised: 19 Oct 2018

See all articles by Ivan Balbuzanov

Ivan Balbuzanov

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 solution for discrete exchange economies and resource-allocation problems, the exclusion core. The exclusion core 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, rather than as bundles of goods, our analysis extends to economies with qualified property rights, joint ownership, social hierarchies, and production. The exclusion core is characterized by a generalized top trading cycle algorithm in a large class of economies, including those featuring private, public, and mixed ownership. It is neither weaker nor stronger than the strong core.

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

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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