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Non-Manipulable House Exchange under (Minimum) Equilibrium Prices

Author

Listed:
  • Andersson, Tommy

    (Department of Economics, Lund University)

  • Ehlers, Lars

    (Département de sciences économiques, Université de Montréal)

  • Svensson, Lars-Gunnar

    (Department of Economics, Lund University)

Abstract

We consider a market with indivisible objects, called houses, and monetary transfers. Each house is initially occupied by one agent and each agent demands exactly one house. The problem is to identify the complete set of direct allocation mechanisms that can be used to reallocate the houses among the agents. On the one hand, for price equilibrium mechanisms, we show that the only strategy-proof mechanism is one with a minimum equilibrium price vector. The result is not true on the classical or the quasi-linear domains, but on reduced domains of preference profiles containing “almost all” profiles in the classical or the quasi-linear domain, respectively. On the other hand, while minimum price equilibrium mechanisms are not necessarily efficient (as prices are not zero), we show that no strategy-proof mechanism Pareto dominates a minimum price equilibrium mechanism, making them constrained efficient in the class of strategy-proof mechanisms.

Suggested Citation

  • Andersson, Tommy & Ehlers, Lars & Svensson, Lars-Gunnar, 2020. "Non-Manipulable House Exchange under (Minimum) Equilibrium Prices," Working Papers 2020:28, Lund University, Department of Economics, revised 04 Nov 2024.
    • Handle: RePEc:hhs:lunewp:2020_028
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    house allocation; initial endowments; minimum equilibrium prices; strategyproofness; constrained efficiency;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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