On informational efficiency and incentive aspects of generalized ratio equilibria Academic Article uri icon


  • In this paper, we investigate the informational efficiency and incentive aspects of the Generalized Ratio Equilibrium (GRE) rule in public goods economies with general variable returns and by-product technologies. We extend Hurwicz's (1979a) results to the cases of non-constant returns and prove that any implementable social choice correspondence that selects Pareto efficient and autarkically individually rational allocations contains GRE allocations, and conversely, the set of GRE allocations contains the interior points of the correspondence. Moreover, we prove that the GRE process is informationally the most efficient process among informationally decentralized and Pareto efficient resource allocation processes and thus that the minimal message space needed for the GRE correspondence is never larger than that needed for the Lindahl correspondence, and that when by products technologies are present, it is smaller than that needed by the Lindahl correspondence. 1994.

published proceedings

  • Journal of Mathematical Economics

author list (cited authors)

  • Tian, G.

citation count

  • 5

complete list of authors

  • Tian, Guoqiang

publication date

  • January 1994