Evolutionary Mechanisms in In...nite Horizon Pure Exchange Economies

We present a decentralized evolutionary mechanism that realizes intertemporal Pareto e¢cient allocations in an in...nite horizon pure exchange economy with n ̧ 2 in...nitely lived consumers. We prove that the mechanism is informationally e¢cient in the sense that no other decentralized mechanism exists (whether it is evolutionary or not) that realizes this intertemporal goal with less information. However we also prove that any mechanism realizing the Pareto correspondence must be biased, which means that some of the Pareto optimal allocations cannot be reached. In particular, the Walrasian allocations cannot be realized by any decentralized evolutionary mechanism, except for a special class of simple economies that we identify. E-mail : [email protected]