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February 1998
In smooth exchange economies with a continuum of agents, any Walrasian mechanism is Pareto efficient, individually rational, anonymous, and strategy-proof.� Barber� and Jackson's (1995) results imply that no such efficient mechanism is the limit of resource-balanced, individually rational, anonymous and non-bossy strategy-proof allocation mechanisms for an expanding sequence of finite economies.� For a broad class of smooth random exchange economies, relaxing anonymity and non-bossiness admits mechanisms which, as the economy becomes infinitely large, are asymptotically Walrasian for all except one ``balancing'' agent, while being manipulable with generically vanishing probability.� Also considered are some extensions to non-Walrasian mechanisms.
JEL classification: D82, D61, D5
Keywords: strategy-proofness, mechanism design, random economies, Walrasian equilibrium.