Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2021:2: An Algorithm for Identifying Least Manipulable Envy-Free and Budget-Balanced Allocations in Economies with Indivisibilities

Tommy Andersson (tommy.andersson@nek.lu.se) and Lars Ehlers (lars.ehlers@umontreal.ca)
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 Ehlers: Département de sciences économiques, Université de Montréal, Postal: Montréal, Canada

Abstract: We analyze the problem of allocating indivisible objects and monetary compensations to a set of agents. In particular, we consider envy-free and budget-balanced rules that are least manipulable with respect to agents counting or with respect to utility gains. A key observation is that, for any profile of quasi-linear preferences, the outcome of any such least manipulable envy-free rule can be obtained via so-called agent-k-linked allocations. Given this observation, we provide an algorithm for identifying agent-k-linked allocations.

Keywords: Envy-freeness; Budget-balance; Least manipulable; Algorithm

JEL-codes: C71; C78; D63; D71; D78

13 pages, January 14, 2021

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