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Faculty Research Working Paper Series
Maciej Kotowski
Associate Professor of Public Policy
phone: (617)495-8514
Endowments, Exclusion, and Exchange
Balbuzanov, Ivan, and Maciej Kotowski. "Endowments, Exclusion, and Exchange." HKS Faculty Research Working Paper Series RWP17-016, March 2017.
Abstract
We propose a new cooperative solution for discrete exchange economies and resource allocation problems, the exclusion core. The exclusion core is neither weaker nor stronger than the (strong) core and it rests upon a foundational idea in the legal understanding of property, the right to exclude others. By reinterpreting endowments as a distribution of exclusion rights, we can extend our analysis to economies with qualified property rights and social hierarchies. The exclusion core characterizes a generalized top trading cycle algorithm in a large class of economies, including those featuring private and public ownership.
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