Characterizing the Typewise Top-Trading-Cycles Mechanism for Multiple-Type Housing Markets

Di Feng, Bettina Klaus (bettina.klaus@unil.ch) and Flip Klijn

No 1341, Working Papers from Barcelona School of Economics

Abstract: We consider the generalization of the classical Shapley and Scarf housing market model (Shapley and Scarf, 1974) to so-called multiple-type housing markets (Moulin, 1995). Throughout the paper, we focus on strict preferences. When preferences are separable, the prominent solution for these markets is the typewise top-trading-cycles (tTTC) mechanism. We first show that for lexicographic preferences, a mechanism is unanimous (or onto), individually rational, strategy-proof, and non-bossy if and only if it is the tTTC mechanism. Second, we obtain a corresponding characterization for separable preferences. We obtain additional characterizations when replacing [strategy-proofness and non-bossiness] with self-enforcing group (or pairwise) strategy-proofness. Finally, we show that for strict preferences, there is no mechanism satisfying unanimity, individual rationality, and strategy-proofness. We obtain further impossibility results for strict preferences based on weakening unanimity to ontoness and on extending the tTTC solution. Our characterizations of the tTTC mechanism constitute the first characterizations of an extension of the prominent top-trading-cycles (TTC) mechanism to multiple-type housing markets.

Keywords: strategy-proofness; market design; non-bossiness; multiple-type housing markets; self-enforcing pairwise strategy-proofness; top-trading-cycles (TTC) mechanism (search for similar items in EconPapers)
JEL-codes: C78 D47 (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-des and nep-ure
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Journal Article: Characterizing the typewise top-trading-cycles mechanism for multiple-type housing markets (2024)
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