On Housing Markets with Indecisive Agents

Emilio Guaman and Juan Pablo Torres-Martinez

Working Papers from University of Chile, Department of Economics

Abstract: We study the non-monetary exchange of indivisible goods when agents may be unable to compare some of them. Adding incomplete preferences to the Shapley-Scarf housing market model, we introduce two concepts of coalitional stability: the core and the strong core. The core is the set of allocations immune to blocking coalitions that improve the well-being of house-switching members, while the strong core is the set of allocations immune to blocking coalitions that may leave some members with a house incomparable with the original. In the domain of incomplete, transitive, and strict preferences, we characterize a family of group strategy-proof mechanisms that always select allocations in the core. Moreover, in the subdomain in which incomplete preferences induce transitive incomparability relations, we show that there are efficient, individually rational, and weakly group strategy-proof mechanisms that select allocations in the strong core when it is non-empty. We also extend these results to housing allocation problems in which existing tenants and newcomers coexist.

Pages: 24 pages
Date: 2023-09
New Economics Papers: this item is included in nep-des and nep-ure
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