Scandinavian Working Papers in Economics
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Department of Economics, Lund University Working Papers, Department of Economics, Lund University

No 2012:8:
Least Manipulable Envy-free Rules in Economies with Indivisibilities

Tommy Andersson (), Lars Ehlers () and Lars-Gunnar Svensson ()

Abstract: We consider envy-free and budget-balanced allocation rules for problems where a number of indivisible objects and a fixed amount of money is allocated among a group of agents. In "small" economies, we identify under classical preferences each agent's maximal gain from manipulation. Using this result we find the envy-free and budget-balanced allocation rules which are least manipulable for each preference profile in terms of any agent's maximal gain. If preferences are quasi-linear, then we can find an envy-free and budget-balanced allocation rule such that for any problem, the maximal utility gain from manipulation is equalized among all agents.

Keywords: (Least) Manipulability; Envy-freeness; Budget-Balance; Indivisibilities.; (follow links to similar papers)

JEL-Codes: C71; C78; D63; D71; D78; (follow links to similar papers)

16 pages, April 25, 2012, Revised September 30, 2013

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This paper is published as:
Andersson, Tommy, Lars Ehlers and Lars-Gunnar Svensson, (2014), 'Least Manipulable Envy-free Rules in Economies with Indivisibilities', Mathematical Social Sciences, Vol. 69, pages 43-49

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