Equitable rent division

Rodrigo Velez

No 20170818-001, Working Papers from Texas A&M University, Department of Economics

Abstract: How should a group of roommates allocate the rooms and contributions to rent in the house they lease? Economists have provided partial answers to this question in a literature that spans the least forty years. Unfortunately, these results were developed in a non-linear fashion, which obscures them to the non-specialist. Recently, computer scientists have developed an interest in this particular problem and have advanced from an algorithmic complexity perspective. Remarkably, an online application, Spliddit.org (Goldman and Procaccia, 2014), has been deployed, gathering thousands of users around the world and sparking new questions about the optimal way to provide recommendations. With this new interest gaining traction in computer science, there is an evident need for a coherent development of the results in economics literature. This paper does so. In particular, we build connections among results that were seemingly unrelated and considerably simplify their development, fill in non-trivial gaps, and identify open questions. Our focus is on incentives issues, the area in which we believe economists have more to contribute in this discussion.

Keywords: inequity aversion; general equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C91 D63 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017-08-18
New Economics Papers: this item is included in nep-exp, nep-gth and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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