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How to Efficiently Allocate Houses under Price Controls?

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  • Andersson , Tommy

    () (Department of Economics, Lund University)

  • Yang , Zaifu

    () (Department of Economics and Related Studies, University of York)

  • Zhang , Dongmo

    () (Intelligent Systems Laboratory, University of Western Sydney)

Abstract

Price controls are used in many regulated markets and well recognized as the cause of market inefficiency. This paper examines a practical housing market in the presence of price controls and provides a solution to the problem of how houses should be efficiently allocated among agents through a system of prices. We demonstrate that the dynamic auction by Talman and Yang (2008) always finds a core allocation in finitely many iterations, thus resulting in a Pareto efficient outcome.

Suggested Citation

  • Andersson , Tommy & Yang , Zaifu & Zhang , Dongmo, 2014. "How to Efficiently Allocate Houses under Price Controls?," Working Papers 2014:24, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2014_024
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    References listed on IDEAS

    as
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    1. repec:eee:ecolet:v:155:y:2017:i:c:p:76-79 is not listed on IDEAS
    2. Andersson, Tommy & Svensson, Lars-Gunnar, 2016. "Strategy-proof house allocation with price restrictions," Journal of Economic Theory, Elsevier, vol. 163(C), pages 167-177.
    3. Gerard van der Laan & Zaifu Yang, 2016. "An ascending multi-item auction with financially constrained bidders," The Journal of Mechanism and Institution Design, Society for the Promotion of Mechanism and Institution Design, University of York, vol. 1(1), pages 109-149, December.

    More about this item

    Keywords

    Ascending auction; assignment market; price control; Pareto efficiency; core;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design

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