Dynamics, stability, and foresight in the Shapley-Scarf housing market
AbstractWhile most of the literature starting with Shapley and Scarf (1974) have considered a static exchange economy with indivisibilities, this paper studies the dynamics of such an economy. We find that both the dynamics generated by competitive equilibrium and the one generated by the weak dominance relation, converge to a set of allocations we define as strictly stable, which we can show to exist. Moreover, we show that even when only pairwise exchanges between two traders are allowed, the strictly stable allocations are attained eventually if traders are sufficiently farsighted.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 46 (2010)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/jmateco
Indivisible goods market Dynamics Competitive allocation Strict core Foresight Stable set;
Other versions of this item:
- Yoshio Kamijo & Ryo Kawasaki, 2009. "Dynamics, Stability, and Foresight in the Shapley-Scarf Housing Market," Working Papers 2009.51, Fondazione Eni Enrico Mattei.
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
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0102-65, Columbia University, Department of Economics.
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