Working Papers,
Lund University, Department of Economics

Abstract: Which strategy-proof nonbossy mechanisms exist in a model with a finite number of indivisible goods (houses, jobs, positions) and a compensating perfectly divisible good (money)? The main finding is that only a finite number of distributions of the divisible good is consistent with strategy-proofness and nonbossiness. Under various additional assumptions - neutrality, individual rationality, object efficiency, weak decentralization - the distribution of the divisible good is further restricted. For instance, under neutrality the outcome of the mechanism can have only one distribution, which is hence independent of individual preferences. In this case the mechanism becomes serially dictatorial. On the other hand, individual rationality leads to a fixed-price equilibrium with a well defined rationing method (Gale's top trading cycle procedure).

Keywords: Strategy-proofness; housing market; indivisible objects

JEL-codes: C71; C78; D71; D78

23 pages, September 18, 2000

Download statistics

Published as

Lars-Gunnar Svensson and Bo Larsson, (2002), 'Strategy-Proof and Nonbossy Allocation of Indivisible Goods and Money', Economic Theory, vol 20, no 3, pages 483-502

• Lund University, Department of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Iker Arregui Alegria ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:lunewp:2000_011This page generated on 2024-09-13 22:16:09.