Sang-Chul Suh

A characterization of the Walras rule

This paper has three purposes. First, we refine the characterization of the Walras rule proposed by Nagahisa (JET 1991) over a more natural and simple domain than the one he employed. We show that the Walras rule is the only social choice rule defined over the domain and satisfying Individual Rationality, Pareto Efficiency, and Local Independence. Second, assuming endowments to be collectively owned, we show that the Walras rule operated from equal division is the only social choice rule satisfying No Envy, Pareto Efficiency, and Local Independence. Third, we show that for every social choice rule satisfying Individual Rationality and Pareto Efficiency, Local Independence is equivalent to a condition of Nash implementation with a game form satisfying convexity.

A mechanism implementing the proportional solution

We consider the problem of a commonly owned technology which transforms a single input into a single output. We are interested in implementing a social choice rule called theproportional solution. We introduce a mechanism which implements the proportional solution in Nash, strong (Nash) and undominated Nash equilibria. In the mechanism each agent announces only two numbers which can be interpreted as the total output and her share of the total input-output combination.

Implementation with coalition formation: A complete characterization

Abstract The basic difference between Nash and strong (Nash) implementations originates from the possibility of coalition formation. The results of Nash implementation are applicable when agents in no group can cooperate (or form a coalition) and those of strong implementation are applicable when agents in every group can cooperate. In the present paper we consider an environment where agents in some groups can cooperate and agents in other groups cannot. We completely characterize the set of correspondences that are implementable in such a general environment, and we provide an algorithm which enables us to verify whether a correspondence satisfies the condition that appears in the characterization results. By applying the algorithm in an exchange economy, we show that the core, the definition of which depends on the possibility of cooperation, is implementable in the equilibrium corresponding to the cooperation possibility.

An algorithm for verifying double implementability in Nash and strong Nash equilibria

Abstract Suh (Suh, S., 1997. Double implementation in Nash and strong Nash. Social Choice and Welfare 14, 439−447.) considered a decision making problem where there are a set of alternatives and a finite number of agents with preferences defined over the set of alternatives, and provided a necessary and sufficient condition for double implementation in Nash and strong Nash equilibria. One problem we encounter in Suh’s paper is that it is difficult to apply the condition directly to a given (social choice) correspondence. Here we provide an algorithm which helps us to verify whether a correspondence satisfies the condition or not.

Subgame perfect implementation of stable matchings in marriage problems

We study a sequential matching mechanism, an extensive form game of perfect information, to implement stable matchings in marriage problems. It is shown that the SPE (subgame perfect equilibrium) of this mechanism leads to the unique stable matching when the Eeckhout (Econ Lett 69:1–8, 2000) condition for the existence of a unique stable matching holds. This result does not extend to preferences that violate the Eeckhout condition, even if the matching problem has a unique stable matching. We then introduce a weaker condition, called the αM condition, under which the SPE outcome of the men-move-first mechanism is the men-optimal stable matching. The αM condition is necessary and sufficient for the men-optimal stable matching to be Pareto optimal for men.

Strategy-proofness and efficiency in a simple production economy

Abstract. We consider an economy with two agents, “firm” and “worker.” The firm owns a technology which transforms a single input into a single output and the worker owns a limited amount of input good, for example, leisure. The firm is interested in profit measured in terms of output and the workers preferences are defined over the input-output space. Manipulability comes not only from a lack of information about the (workers) preferences but also about the technology. With a possibility for manipulation, can we still obtain efficient allocations? We show that there is no allocation mechanism which is Pareto efficient, strategy-proof, and non-dictatorial.

Flexibility mechanisms and credit discounting

We consider the international treaties on climate change as self-enforcing agreements. Applying non-cooperative game theory, we interpret the UN framework Convention on Climate Change as a Nash equilibrium outcome of an international abatement game where only domestic abatement is allowed. The Kyoto Protocol is a Nash equilibrium outcome of the game where flexibility mechanisms are introduced. We also show that credit discounting on foreign abatement can Pareto improve the welfare of all countries.