Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2015:18: Sequential Rules for House Allocation with Price Restrictions

Tommy Andersson () and Lars-Gunnar Svensson ()
Additional contact information
Tommy Andersson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
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: This paper considers a housing market with price restrictions. On such market, price equilibrium may be excluded for certain preference profiles. However, the existence of a unique minimal rationing price equilibrium has previously been established on a general preference domain that contains “almost all” preference profiles. This type of equilibrium has been demonstrated to be an important ingredient in a direct and strategy-proof allocation mechanism for housing markets with price restrictions. The main contribution of this paper is to provide a finite ascending price sequence that terminates to a minimal rationing price equilibrium. This sequence is demonstrated to play a key-role in an Iterative English Auction Rule for housing markets with price restrictions.

Keywords: Rationing Price Equilibrium; (Extended) English Price Sequences; Iterative English Auction Rule

JEL-codes: C78; D44; D45

36 pages, First version: June 10, 2015. Revised: October 11, 2017. Earlier revisions: October 14, 2015, August 11, 2016, April 27, 2017.

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