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

No 2014:24:
How to Efficiently Allocate Houses under Price Controls?

Tommy Andersson (), Zaifu Yang () and Dongmo Zhang ()

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.

Keywords: Ascending auction; assignment market; price control; Pareto efficiency; core; (follow links to similar papers)

JEL-Codes: C71; D44; D47; (follow links to similar papers)

17 pages, June 13, 2014

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This paper is published as:
Andersson, Tommy, Zaifu Yang and Dongmo Zhang, (2015), 'How to Efficiently Allocate Houses under Price Controls?', Economics Letters, Vol. 130, pages 97-99

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