Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2002:17: Strategy-proofness and Fixed-price Allocation of Indivisible Goods - a Characterization Proof

Lars-Gunnar Svensson ()
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Lars-Gunnar Svensson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: In this paper we considered the classical Shapley-Scarf (1974) "house allocation model", where in addition there is a perfectly divisible good (money). The problem is to characterize all strategy-proof, nonbossy and individually rational allocation mechanisms. The finding is that only a fixed-price allocation mechanism is consistent with these presumptions. Miyagawa (2001) first proved this result. Here we give an alternative and comparatively short proof of the characterization result.

Keywords: Strategy-proof; Indivisible object; Housing market

JEL-codes: C71; C78; D71; D78

11 pages, June 7, 2002

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