Endogenous budget constraints in the assignment game

David Cantala and Juan Sebastian Pereyra Barreiro

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: This paper studies economies with indivisible goods and budgetconstrained agents with unit-demand who act as both sellers and buyers. In prior literature on the existence of competitive equilibrium, it is assumed the indispensability of money, which in turn implies that budgets constraints are irrelevant. We introduce a new condition, Money Scarcity (MS), that considers agents' budget constraints and ensures the existence of equilibrium. Moreover, an extended version of Gale's top trading cycles algorithm is presented, and it is shown that under MS this mechanism is strategy-proof. Finally, we prove that this mechanism is the unique mechanism that minimizes money transactions at equilibrium.

Keywords: Assignment game; Auction mechanism; Competitive equilibrium; Endogenous budget constraint; Indivisibility; Top trading cycles (search for similar items in EconPapers)
Date: 2015
Note: SCOPUS: ar.j
References: Add references at CitEc
Citations:

Published in: Journal of Dynamics and Games (2015) v.2 n° 3-4,p.207-225

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/282616

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/282616

Access Statistics for this paper

More papers in ULB Institutional Repository from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().