Walrasian Mechanisms for Non-Convex Economies and the Bound-Form First Welfare Theorem

We introduce two extensions of the Walrasian mechanism for quasilinear economies to allow agents to report non-concave values and non-convex costs. The extended mechanisms, which always deliver feasible, near-efficient allocations with no budget deficit, are computationally undemanding and nearly incentive-compatible. We also introduce an extension of the First Welfare Theorem allowing us to upper bound the welfare losses from these mechanisms.

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