Constrained optimal transport with an application to large markets with indivisible goods

Koji Yokote

Papers from arXiv.org

Abstract: We establish a variant of Monge--Kantorovich duality for a constrained optimal transport problem with a continuum of agents, a finite set of alternatives, and general linear constraints. As an application, we revisit the large-market model of indivisible goods in Azevedo et al. (2013), identify a flaw in the original equilibrium-existence proof stemming from an incorrect compactness claim, and recover equilibrium existence via our duality approach. We also characterize equilibrium prices as minimizers of a potential function, which yields a method for computing equilibrium prices.

Date: 2026-04
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