IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-25-00479.html

An impossibility in housing markets with contracts

Author

Listed:
  • Jinyong Jeong

    (Li Anmin Institute of Economic Research, Liaoning University)

Abstract

This paper extends the classical housing-market model of Shapley and Scarf (1974) to an environment with contractual terms and demonstrates an impossibility result: no mechanism can simultaneously satisfy Pareto efficiency, term-consistent property rights, and strategy-proofness. The result isolates how introducing contractual dimensions disrupts the alignment of incentives that underlies the top trading cycles mechanism. The analysis identifies the minimal structure generating nonexistence and clarifies the limits of truthful implementation in exchange economies with indivisible goods and contract-contingent rights.

Suggested Citation

  • Jinyong Jeong, 2026. "An impossibility in housing markets with contracts," Economics Bulletin, AccessEcon, vol. 46(2), pages 767-778.
    • Handle: RePEc:ebl:ecbull:eb-25-00479
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2026/Volume46/EB-26-V46-I2-P66.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Klaus, Bettina & Klijn, Flip & Sethuraman, Jay, 2025. "A characterization of the top-trading-cycles mechanism for housing markets via respecting-improvement," Economics Letters, Elsevier, vol. 247(C).
    2. Imamura, Kenzo & Kawase, Yasushi, 2025. "Efficient and strategy-proof mechanism under general constraints," Theoretical Economics, Econometric Society, vol. 20(2), May.
    3. Jinyong Jeong, 2021. "Matching with property rights: an application to Korean teacher transfer program," Review of Economic Design, Springer;Society for Economic Design, vol. 25(3), pages 139-156, September.
    4. Ma, Jinpeng, 1994. "Strategy-Proofness and the Strict Core in a Market with Indivisibilities," International Journal of Game Theory, Springer;Game Theory Society, vol. 23(1), pages 75-83.
    5. Roth, Alvin E., 1982. "Incentive compatibility in a market with indivisible goods," Economics Letters, Elsevier, vol. 9(2), pages 127-132.
    6. Ramezanian, Rasoul & Feizi, Mehdi, 2022. "Robust ex-post Pareto efficiency and fairness in random assignments: Two impossibility results," Games and Economic Behavior, Elsevier, vol. 135(C), pages 356-367.
    7. Roth, Alvin E. & Postlewaite, Andrew, 1977. "Weak versus strong domination in a market with indivisible goods," Journal of Mathematical Economics, Elsevier, vol. 4(2), pages 131-137, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Yajing & Jiao, Zhenhua & Zhang, Chenfeng & Zhang, Luosai, 2025. "Some new characterizations of top trading cycles," Journal of Mathematical Economics, Elsevier, vol. 121(C).
    2. Ivan Balbuzanov & Maciej H. Kotowski, 2019. "Endowments, Exclusion, and Exchange," Econometrica, Econometric Society, vol. 87(5), pages 1663-1692, September.
    3. Takamiya, Koji, 2001. "Coalition strategy-proofness and monotonicity in Shapley-Scarf housing markets," Mathematical Social Sciences, Elsevier, vol. 41(2), pages 201-213, March.
    4. Di Feng & Bettina Klaus, 2022. "Preference revelation games and strict cores of multiple‐type housing market problems," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(1), pages 61-76, March.
    5. Sonmez, Tayfun & Utku Unver, M., 2005. "House allocation with existing tenants: an equivalence," Games and Economic Behavior, Elsevier, vol. 52(1), pages 153-185, July.
    6. Aslan, Fatma & Lainé, Jean, 2020. "Competitive equilibria in Shapley–Scarf markets with couples," Journal of Mathematical Economics, Elsevier, vol. 89(C), pages 66-78.
    7. Tommy ANDERSSON & Lars EHLERS & Lars-Gunnar SVENSSON, 2014. "Transferring Ownership of Public Housing to Existing Tenants : A Mechanism Design Approach," Cahiers de recherche 09-2014, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    8. Yuji Fujinaka & Takuma Wakayama, 2011. "Secure implementation in Shapley–Scarf housing markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 48(1), pages 147-169, September.
    9. YIlmaz, Özgür, 2010. "The probabilistic serial mechanism with private endowments," Games and Economic Behavior, Elsevier, vol. 69(2), pages 475-491, July.
    10. Bettina Klaus, 2024. "Characterizing the top trading cycles rule for housing markets with lexicographic preferences," Papers 2410.16745, arXiv.org.
    11. Sumit Goel & Yuki Tamura, 2025. "TTC Domains," Papers 2501.15422, arXiv.org, revised Jun 2026.
    12. Hong, Miho & Park, Jaeok, 2022. "Core and top trading cycles in a market with indivisible goods and externalities," Journal of Mathematical Economics, Elsevier, vol. 100(C).
    13. Di Feng & Bettina Klaus & Flip Klijn, 2022. "A Characterization of the Coordinate-Wise Top-Trading-Cycles Mechanism for Multiple-Type Housing Markets," Cahiers de Recherches Economiques du Département d'économie 22.06, Université de Lausanne, Faculté des HEC, Département d’économie.
    14. Miyagawa, Eiichi, 2001. "House Allocation with Transfers," Journal of Economic Theory, Elsevier, vol. 100(2), pages 329-355, October.
    15. Di Feng, 2023. "Endowments-swapping-proofness and Efficiency in Multiple-Type Housing Markets," Discussion Paper Series DP2023-14, Research Institute for Economics & Business Administration, Kobe University.
    16. Yannai A. Gonczarowski & Clayton Thomas, 2022. "Structural Complexities of Matching Mechanisms," Papers 2212.08709, arXiv.org, revised Mar 2024.
    17. Sonmez, Tayfun, 1996. "Implementation in generalized matching problems," Journal of Mathematical Economics, Elsevier, vol. 26(4), pages 429-439.
    18. Ekici, Özgün & Sethuraman, Jay, 2024. "Characterizing the TTC rule via pair-efficiency: A short proof," Economics Letters, Elsevier, vol. 234(C).
    19. Morrill, Thayer & Roth, Alvin E., 2024. "Top trading cycles," Journal of Mathematical Economics, Elsevier, vol. 112(C).
    20. Jaramillo, Paula & Manjunath, Vikram, 2012. "The difference indifference makes in strategy-proof allocation of objects," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1913-1946.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-25-00479. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.