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A Characterization of the Top-Trading-Cycles Mechanism for Housing Markets via Respecting-Improvement

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  • Bettina Klaus
  • Flip Klijn
  • Jay Sethuraman

Abstract

We provide the first characterization of the prominent top-trading-cycles (TTC) mechanism in the Shapley-Scarf housing market model (Shapley and Scarf, 1974) that uses respecting-improvement. Specifically, we show that for strict preferences, the TTC mechanism is the unique mechanism satisfying pair-efficiency, respecting-improvement, and strategy-proofness.

Suggested Citation

  • Bettina Klaus & Flip Klijn & Jay Sethuraman, 2024. "A Characterization of the Top-Trading-Cycles Mechanism for Housing Markets via Respecting-Improvement," Working Papers 1468, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1468
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    References listed on IDEAS

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    1. Bird, Charles G., 1984. "Group incentive compatibility in a market with indivisible goods," Economics Letters, Elsevier, vol. 14(4), pages 309-313.
    2. Anno, Hidekazu, 2015. "A short proof for the characterization of the core in housing markets," Economics Letters, Elsevier, vol. 126(C), pages 66-67.
    3. Lars-Gunnar Svensson, 1999. "Strategy-proof allocation of indivisible goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(4), pages 557-567.
    4. Shapley, Lloyd & Scarf, Herbert, 1974. "On cores and indivisibility," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 23-37, March.
    5. Sandholtz, Will & Tai, Andrew, 2024. "Group incentive compatibility in a market with indivisible goods: A comment," Economics Letters, Elsevier, vol. 243(C).
    6. Ekici, Özgün, 2024. "Pair-efficient reallocation of indivisible objects," Theoretical Economics, Econometric Society, vol. 19(2), May.
    7. 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.
    8. Ekici, Özgün & Sethuraman, Jay, 2024. "Characterizing the TTC rule via pair-efficiency: A short proof," Economics Letters, Elsevier, vol. 234(C).
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    Cited by:

    1. Minoru Kitahara & Hiroshi Uno, 2025. "Complete Exchange Mechanisms," Papers 2511.11278, arXiv.org.

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    Keywords

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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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