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Manipulation via Endowments in Exchange Markets with Indivisible Goods

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  • Murat Atlamaz

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  • Bettina Klaus

    ()

Abstract

We consider exchange markets with heterogeneous indivisible goods. We are interested in exchange rules that are efficient and immune to manipulations via endowments (either with respect to hiding or destroying part of the endowment or transferring part of the endowment to another trader). We consider three manipulability axioms: hiding-proofness, destruction-proofness, and transfer-proofness. We prove that no rule satisfying efficiency and hiding-proofness (which implies individual rationality) exists. For two-agent exchange markets with separable and responsive preferences, we show that efficient, individually rational, and destruction-proof rules exist. However, for separable preferences, no rule satisfies efficiency, individual rationality, and destruction-proofness. In the case of transfer-proofness the compatibility with efficiency and individual rationality for the two-agent case extends to the unrestricted domain. For exchange markets with separable preferences and more than two agents no rule satisfies efficiency, individual rationality, and transfer-proofness.
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Suggested Citation

  • Murat Atlamaz & Bettina Klaus, 2007. "Manipulation via Endowments in Exchange Markets with Indivisible Goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(1), pages 1-18, January.
  • Handle: RePEc:spr:sochwe:v:28:y:2007:i:1:p:1-18 DOI: 10.1007/s00355-006-0159-2
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    References listed on IDEAS

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    1. Andrew Postlewaite, 1979. "Manipulation via Endowments," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 255-262.
    2. Sertel, Murat R. & Ozkal-Sanver, Ipek, 2002. "Manipulability of the men- (women-) optimal matching rule via endowments," Mathematical Social Sciences, Elsevier, vol. 44(1), pages 65-83, September.
    3. Bettina Klaus & Hans Peters & Ton Storcken, 1997. "Reallocation of an infinitely divisible good," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(2), pages 305-333.
    4. Fiestras-Janeiro, Gloria & Klijn, Flip & Sanchez, Estela, 2004. "Manipulation of optimal matchings via predonation of endowment," Mathematical Social Sciences, Elsevier, pages 295-312.
    5. Shapley, Lloyd & Scarf, Herbert, 1974. "On cores and indivisibility," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 23-37, March.
    6. Barbera, Salvador & Sonnenschein, Hugo & Zhou, Lin, 1991. "Voting by Committees," Econometrica, Econometric Society, vol. 59(3), pages 595-609, May.
    7. Bettina Klaus & Hans Peters & Ton Storcken, 1998. "Strategy-proof division with single-peaked preferences and individual endowments," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(2), pages 297-311.
    8. Tayfun Sonmez, 1999. "Strategy-Proofness and Essentially Single-Valued Cores," Econometrica, Econometric Society, vol. 67(3), pages 677-690, May.
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    Citations

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    Cited by:

    1. James Schummer & Rakesh V. Vohra, 2013. "Assignment of Arrival Slots," American Economic Journal: Microeconomics, American Economic Association, vol. 5(2), pages 164-185, May.
    2. Klaus, Bettina & Dimitrov, Dinko & Haake, Claus-Jochen, 2006. "Bundling in exchange markets with indivisible goods," Economics Letters, Elsevier, vol. 93(1), pages 106-110, October.
    3. S. Akin & Brennan Platt & Murat Sertel, 2011. "The n-person Kalai-Smorodinsky bargaining solution under pre-donations," Review of Economic Design, Springer;Society for Economic Design, vol. 15(2), pages 147-162, June.
    4. Luis Corchón & Matteo Triossi, 2008. "Implementation with renegotiation when preferences and feasible sets are state dependent," Documentos de Trabajo 255, Centro de Economía Aplicada, Universidad de Chile.
    5. Nanyang Bu & Siwei Chen & William Thomson, 2014. "Merging and splitting endowments in object assignment problems," RCER Working Papers 587, University of Rochester - Center for Economic Research (RCER).
    6. Somdeb Lahiri, 2005. "Manipulation via Endowments in a Market with Profit Maximizing Agents," Game Theory and Information 0511008, EconWPA.
    7. Doruk İriş & İpek Özkal-Sanver, 2011. "Manilulation via endowments in university-admission problem," Economics Bulletin, AccessEcon, vol. 31(4), pages 2952-2958.
    8. William Thomson, 2009. "Borrowing-proofness," RCER Working Papers 545, University of Rochester - Center for Economic Research (RCER).
    9. Lahiri, Somdeb, 2008. "Manipulation of market equilibrium via endowments," MPRA Paper 10002, University Library of Munich, Germany.
    10. Dimitrov, Dinko & Haake, Claus-Jochen, 2011. "Regrouping of endowments in exchange markets with indivisible goods," Center for Mathematical Economics Working Papers 367, Center for Mathematical Economics, Bielefeld University.
    11. repec:eee:matsoc:v:87:y:2017:i:c:p:75-84 is not listed on IDEAS
    12. Luis Corchón & Matteo Triossi, 2011. "Implementation with renegotiation when preferences and feasible sets are state dependent," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(2), pages 179-198, February.

    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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