Cahiers du CEREMADE 

Unité
Mixte de Recherche du C.N.R.S. N°7534 

Abstract : The ex ante incentive compatible core of an exchange economy
with private information is the (standard) core of a socially designed
characteristic function, which expresses the fact that coalitions allocate
goods by means of random incentive compatible mechanisms.
We first survey some results in the case of perfectly divisible goods.
Examples then show that the ex ante incentive compatible core can
be empty, even if utility functions are quasilinear. If, in addition to
quasilinearity, further assumptions are made (like independent private values),
the nonemptiness of the core follows nevertheless from
dâ€™Aspremont and GĂ©rardVaretâ€™s construction of incentive compatible,
ex post efficient mechanisms.
We also introduce a private information version of Shapley and
Scarfâ€™s economies with indivisible goods, and prove that the ex ante
incentive compatible core is always nonempty in this framework






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