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Non-Manipulable House Exchange under (Minimum) Equilibrium Prices

Author

Listed:
  • Andersson , Tommy

    (Department of Economics, Lund University)

  • Ehlers , Lars

    (Département de sciences économiques, Université de Montréal)

  • Svensson , Lars-Gunnar

    (Department of Economics, Lund University)

Abstract

We consider a market with indivisible objects, called houses, and money. On this market, each house is initially owned (or rented) by some agent and each agent demands precisely one house. The problem is to identify the complete set of direct allocation mechanisms that can be used to reallocate the houses among the agents. The focus is on price mechanisms, i.e., mappings of preference profiles to price equilibria, that are strategy-proof and satisfy an individual rationality condition. We prove that the only mechanism that satisfies these conditions is a price mechanism with a minimal equilibrium price vector. The result is not true in full preference domain. Instead, we identify a smaller domain, that contains almost all profiles, where the result holds.

Suggested Citation

  • Andersson , Tommy & Ehlers , Lars & Svensson , Lars-Gunnar, 2020. "Non-Manipulable House Exchange under (Minimum) Equilibrium Prices," Working Papers 2020:28, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2020_028
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Public housing; existing tenants; equilibrium; minimum equilibrium prices; domain;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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