Strategy-Proofness and the Core in House Allocation Problems

Author: Miyagawa E.

Source: Games and Economic Behavior, Volume 38, Number 2, February 2002 , pp. 347-361(15)

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Abstract:

We study house allocation problems introduced by L. Shapley and H. Scarf (1974, J. Math. Econ. 1, 23–28). We prove that a mechanism (a social choice function) is individually rational, anonymous, strategy-proof, and nonbossy (but not necessarily Pareto efficient) if and only if it is either the core mechanism or the no-trade mechanism, where the no-trade mechanism is the one that selects the initial allocation for each profile of preferences. This result confirms the intuition that even if we are willing to accept inefficiency, there exists no interesting strategy-proof mechanism other than the core mechanism. Journal of Economic Literature Classification Numbers: C71, C78, D71, D78, D89. © 2001 Elsevier Science.

Keywords: strategy-proofness; nonbossiness; indivisible goods; housing market; mechanism design

Language: English

Document Type: Research article

Affiliations: Department of Economics, Columbia University, New York, New York, 10027

Publication date: 2002-02-01