House Allocation with Overlapping Agents: A Dynamic Mechanism Design Approach

Morimitsu Kurino ()
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Morimitsu Kurino: Max Planck Institute of Economics, Jena, Germany

No 2009-075, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Many real-life applications of house allocation problems are dynamic. For example, in the case of on-campus housing for college students, each year freshmen apply to move in and graduating seniors leave. Each student stays on campus for a few years only. A student is a "newcomer" in the beginning and then becomes an "existing tenant". Motivated by this observation, we introduce a model of house allocation with overlapping agents. In terms of dynamic mechanism design, we examine two representative static mechanisms of serial dictatorship (SD) and top trading cycles (TTC), both of which are based on an ordering of agents and give an agent with higher order an opportunity to obtain a better house. We show that for SD mechanisms, the ordering that favors existing tenants is better than the one that favors newcomers in terms of Pareto efficiency. Meanwhile, this result holds for TTC mechanisms under time-invariant preferences in terms of Pareto efficiency and strategy-proofness. We provide another simple dynamic mechanism that is strategy-proof and Pareto efficient.

Keywords: house allocation; overlapping agents; dynamic mechanism; top trading cycles; serial dictatorship (search for similar items in EconPapers)
JEL-codes: C71 C78 D71 D78 (search for similar items in EconPapers)
Date: 2009-09-25
New Economics Papers: this item is included in nep-gth and nep-ure
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Citations: View citations in EconPapers (3)

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