Implementation with renegotiation when preferences and feasible sets are state dependent

Artículo de publicación ISIIn this paper, we present a model of implementation where infeasible allocations are converted into feasible ones through a process of renegotiation that is represented by a reversion function. We describe the maximal set of Social Choice Correspondences that can be implemented in Nash Equilibrium in a class of reversion functions that punish agents for infeasibilities. This is used to study the implementation of the Walrasian Correspondence and several axiomatic solutions to problems of bargaining and taxation.Both authors acknowledge financial support from CAICYT under project SEJ2005-06167/ECON and from Fundación BBVA. The second author acknowledge financial support from FONDECYT under project 11080132