Abstract
The authors identify some fundamental conditions that a 'natural' mechanism should satisfy in exchange economies. First, they provide necessary and sufficient conditions for social choice correspondences to be implemented in Nash equilibria by natural mechanisms. Second, they show that the class of social choice correspondences implementable by (price and) two-quantity mechanisms is equivalent to the class of social choice correspondences implementable by (price and) allocation mechanisms. Third, the authors find that the no-envy correspondence is implementable by a two-quantity mechanism and the fair correspondence is implementable by a price-quantity mechanism. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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