The Incentive Ratio in Exchange Economies
نویسنده
چکیده
The incentive ratio measures the utility gains from strategic behaviour. Without any restrictions on the setup, ratios for linear, Leontief and Cobb–Douglas exchange markets are unbounded, showing that manipulating the equilibrium is a worthwhile endeavour, even if it is computationally challenging. Such unbounded improvements can be achieved even if agents only misreport their utility functions. This provides a sharp contrast with previous results from Fisher markets. When the Cobb–Douglas setup is more restrictive, the maximum utility gain is bounded by the number of commodities. By means of an example, we show that it is possible to exceed a known upper bound for Fisher markets in exchange economies.
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