The Ex Ante Incentive Compatible Core in the Absence of Wealth Effects
Françoise Forges, Jean–François Mertens, Rajiv Vohra
Econometrica · 2002 · Volume 70 · Issue 5
Abstract
In a differential information economy with quasi–linear utilities, monetary transfers facilitate the fulfillment of incentive compatibility constraints: the associated ex ante core is generically nonempty. However, we exhibit a well–behaved exchange economy in which this core is empty, even if goods are allocated through random mechanisms.
Keywords
core, exchange economy, asymmetric information, incentive compatibility, ex ante, transferable utility, absence of wealth effects, quasi–linear
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