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Housing market models with consumption externalities

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We analyze housing market models à la Shapley and Scarf with externalities in consumption; that is, agents care about others and their preferences are defined over allocations rather than over single indivisible goods. After collecting some negative results about the existence of several cooperative solutions, we focus on stable allocations and search for special domains of preferences that can guarantee that they both exist and form a stable set à la von Neumann and Morgenstern.

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  • Maria Gabriella Graziano & Claudia Meo & Nicholas C. Yannelis, 2018. "Housing market models with consumption externalities," CSEF Working Papers 500, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:500
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    1. Graziano, Maria Gabriella & Meo, Claudia & Yannelis, Nicholas C., 2017. "Stable sets for exchange economies with interdependent preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 267-286.
    2. Martin Dufwenberg & Paul Heidhues & Georg Kirchsteiger & Frank Riedel & Joel Sobel, 2011. "Other-Regarding Preferences in General Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(2), pages 613-639.
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    5. Kawasaki, Ryo, 2015. "Roth–Postlewaite stability and von Neumann–Morgenstern stability," Journal of Mathematical Economics, Elsevier, vol. 58(C), pages 1-6.
    6. Shapley, Lloyd & Scarf, Herbert, 1974. "On cores and indivisibility," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 23-37, March.
    7. Velez, Rodrigo A., 2016. "Fairness and externalities," Theoretical Economics, Econometric Society, vol. 11(1), January.
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    More about this item

    Keywords

    Indivisible goods; other-regarding preferences; core; stable allocations; stable sets.;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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