Preference Revelation Games and Strong Cores of Allocation Problems with Indivisibilities
This paper studies the incentive compatibility of solutions to generalized indivisible good allocation problems introduced by Sonmez (1999), which contain the well-known marriage problems (Gale and Shapley, 1962) and the housing markets (Shapley and Scarf, 1974) as special cases. In particular, I consider the vulnerability to manipulation of solutions that are individually rational and Pareto optimal. By the results of Sonmez (1999) and Takamiya (2003), any individually rational and Pareto optimal solution is strategy-proof if and only if the strong core correspondence is essentially single-valued, and the solution is a strong core selection. Given this fact, this paper examines the equilibrium outcomes of the preference revelation games when the strong core correspondence is not necessarily essentially single-valued. I show that for the preference revelation games induced by any solution which is individually rational and Pareto optimal, the set of strict strong Nash equilibrium outcomes coincides with the strong core. This generalizes one of the results by Shin and Suh (1996) obtained in the context of the marriage probelms. Further, I examine the other preceding results proved for the marriage problems (Alcalde, 1996; Shin and Suh, 1996; Sonmez, 1997) to find that none of those results are generalized to the general model.
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- Alcalde, Jose, 1996.
"Implementation of Stable Solutions to Marriage Problems,"
Journal of Economic Theory,
Elsevier, vol. 69(1), pages 240-254, April.
- José Alcalde, 1995. "Implementation of Stable Solutions to Marriage Problems," Working Papers. Serie AD 1995-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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"A group incentive compatible mechanism yielding core allocations,"
Journal of Economic Theory,
Elsevier, vol. 20(1), pages 13-22, February.
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- 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.
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Handbook of Game Theory with Economic Applications,
in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541
- Tayfun Sonmez, 1999. "Strategy-Proofness and Essentially Single-Valued Cores," Econometrica, Econometric Society, vol. 67(3), pages 677-690, May.
- William Thomson, 1984. "The Manipulability of Resource Allocation Mechanisms," Review of Economic Studies, Oxford University Press, vol. 51(3), pages 447-460.
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