A simple auctioneerless mechanism with Walrasian properties

Abstract A simple mechanism for reallocating holdings is described, in which no auctioneer is required: outcomes are determined solely from traders' actions and without any requirement that the mechanism be in equilibrium. The mechanism is shown to exactly duplicate the performance of the Walrasian auctioneer (both in its equilibria and in its disequilibrium path) if individuals are price takers, and, if the number of individuals is large, to approximately duplicate the auctioneer's performance even when individuals behave strategically, each taking account of his own influence on prices.

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