Econometrica: Jul 1978, Volume 46, Issue 4

Information, Efficiency, and the Core of an Economy<807:IEATCO>2.0.CO;2-C
p. 807-816

Robert Wilson

The meaning of exchange efficiency is examined in the context of an economy in which agents differ in their endowments of information. Definitions of efficiency, and of the core, are proposed which emphasize the role of communication. Opportunities for insurance are preserved by restricting communication, or in a market system by restricting insider trading, prior to the pooling of information for the purposes of production.

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