The Communication Requirements of of Social Choice Rules and Supporting Budget Sets

The paper examines the communication requirements of social choice rules when the (sincere) agents privately know their preferences. It shows that for a large class of choice rules, any communication verifying that an alternative is in the rule must reveal supporting budget sets for the agents such that the optimality of the proposed alternative to all agents within their respective budget set in itself verifies the alternative. We characterize the budget equilibria that are the minimally informative messages verifying a given choice rule. This characterization is used to identify the communication burden of choice rules, measured with the number of transmitted bits or real variables. Applications include efficiency in convex economies, exact or approximate surplus maximization in combinatorial auctions, the core in indivisible good economies, and stable many-to-one matchings.social choice rules, budget equilibria, choice rules efficiency in convex economies

Competitive Market Mechanisms as Social Choice Procedures

A competitive market mechanism is a prominent example of a non-binary social choice rule, typically defined for a special class of economic environments in which each social state is an economic allocation of private goods, and individuals' preferences concern only their own personal consumption. This chapter begins by discussing which Pareto efficient allocations can be characterized as competitive equilibria with lump-sum transfers. It also discusses existence and characterization of such equilibria without lump-sum transfers. The second half of the chapter focuses on continuum economies, for which such characterization results are much more natural given that agents have negligible influence over equilibrium prices.

Competitive market mechanisms as social choice procedures

A competitive market mechanism is a prominent example of a non-binary social choice rule, typically defined for a special class of economic environments in which each social state is an economic allocation of private goods, and individuals' preferences concern only their own personal consumption. This chapter begins by discussing which Pareto efficient allocations can be characterized as competitive equilibria with lump-sum transfers. It also discusses existence and characterization of such equilibria without lump-sum transfers. The second half of the chapter focuses on continuum economies, for which such characterization results are much more natural given that agents have negligible influence over equilibrium prices

Listing Price and Non-Price-Taking behavior in market mechanisms with differential information

Abstract 1 This work investigates the optimal initial public offering mechanism (IPO) comparing the book-building, the fixed price offer and the auction to understand if the supremacy of the first mechanism is economically justified or if there are other motivations behind. In the first chapter, a survey of the theories concerning the underpricing and a general overview of the market evolution are presented. Later, let us present a theoretical model in which the listing methods are compared basis on the firm’s profit. It examines what are the key variables studied by the issuer to decide the mechanism maximizing its revenue. The information cost and the reservation utility of the investors turn out the most significant variables. Abstract 2 This work considers an exchange economy with a finite number of agents and a finite number of goods where the agents are arbitragers. The general equilibrium theory borrows the notion of arbitrage to the finance for showing how the consumers move in an economy closer to the real world with uncertainty and differential information. The first chapter describes the notion of arbitrage, its evolution during the years through the eyes of several authors. The second chapter analyses the main aspects of a differential information economy, studying the concept of core and competitive equilibrium in the ex-ante, in the interim and in the ex-post stage. In the last chapter, the arbitrage condition becomes the guideline for defining new notions of competitive equilibrium when the economy is characterized by uncertainty and differential information