Core rationalizability in two-agent exchange economies.
type: Item
instance of: scholarly article
title: Core rationalizability in two-agent exchange economies.
zbMATH Open document ID: 1037.91068
author: Walter Bossert
author: Yves Sprumont
published in: Economic Theory
publication date: 2002-01-01T00:00:00Z
full work available at URL: 07Bossert.pdf
review text: This is an interesting paper that continues the author' (especially the second author's) investigations on the collective rational choice in a two-agent exchange economy. The standard issue considered in the literature is the rationalizability of collective choice by means of a single social ordering. The problem analyzed in this paper deviates from the standard framework and investigates whether the observed social choices can be rationalized by a profile of individual preference relations rather than a single social ranking. To this question, the work of \textit{Y. Sprument} [J. Econ. Theory 93, 205--232 (2000; Zbl 0976.91014)] obtains existence conditions of preference profiles that generate observed choices as Nash equilibria or as Pareto efficient outcomes. The present paper provides, in the context of a two-agent exchange economy, necessary and sufficient conditions for the observed selections to be rationalized in terms of the core elementa generated by a profile of individual preferences with standard properties. The authors propose four axioms for characterizing the core rationalizability: Regularity, Persistence, Strict Path Monotonicity, and Strict Averaging Reduction. These axioms are shown to be independent and to provide necessary and sufficient conditions for the core rationalizability of a selection correspondence in a two-agent exchange economy, determining uniquely its rationalizing profile. For the case of two-agent, the core rationalizability coincides with the set of Pareto efficient and individually rational allocations, while the general \(n\)-agent case still remains a difficult, open problem. A helpful comparison between the present approach and [Sprumont loc. cit.] is discussed. Since the core of the rationalized observed selections is the subset of the Pareto set of efficient allocations, the present paper studies equivalent conditions for the core stable choices of commodity allocations from fixed feasibility sets, while [Sprumont loc. ci…
Mathematics Subject Classification ID: 91B54
Mathematics Subject Classification ID: 91B32
Mathematics Subject Classification ID: 91B14
Mathematics Subject Classification ID: 91B10
Mathematics Subject Classification ID: 91B08
zbMATH DE Number: 1850400
zbMATH Keywords: collective rationality
zbMATH Keywords: two-agent exchange economics
zbMATH Keywords: rationalizability cores
zbMATH Keywords: Pareto set of allocations
MaRDI profile type: Publication
OpenAlex ID: W2002204683
DOI: 10.1007/S00199-001-0241-Z
description: scientific article; zbMATH DE number 1850400