Comparative Statics in Markets for Indivisible Goods
AbstractWe complete the study of comparative statics initiated in Caplin and Leahy , which introduced a new mathematical apparatus for understanding NTU allocation markets, as such covering the housing market and other markets for large indivisible goods. We introduce homotopy methods to characterize how equilibrium changes in response to arbitrary parameter changes. Generically, we show that there can be five and only five qualitatively distinct forms of market transition: Graft; Prune and Plant; Prune and Graft; Cycle and Reverse; and Shift and Replant. Our path-following methods identify new algorithms for computing market equilibria.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16285.
Date of creation: Aug 2010
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Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
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- Demange, Gabrielle & Gale, David, 1985. "The Strategy Structure of Two-sided Matching Markets," Econometrica, Econometric Society, vol. 53(4), pages 873-88, July.
- Demange, Gabrielle & Gale, David & Sotomayor, Marilda, 1986. "Multi-Item Auctions," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 863-72, August.
- Kaneko, Mamoru, 1982.
"The central assignment game and the assignment markets,"
Journal of Mathematical Economics,
Elsevier, vol. 10(2-3), pages 205-232, September.
- Mamoru Kaneko, 1980. "The Central Assignment Game and the Assignment Markets," Cowles Foundation Discussion Papers 563, Cowles Foundation for Research in Economics, Yale University.
- Andrew Caplin & John V. Leahy, 2010. "A Graph Theoretic Approach to Markets for Indivisible Goods," NBER Working Papers 16284, National Bureau of Economic Research, Inc.
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