Equitable rent division on a soft budget

Rodrigo A. Velez

Games and Economic Behavior, 2023, vol. 139, issue C, 1-14

Abstract: We study the incentive properties of envy-free mechanisms for the allocation of rooms and payments of rent among financially constrained roommates. Each agent reports their values for rooms, their housing earmark (soft budget), and a coefficient that reflects the difficulty the agent experiences from having to pay over this amount. Then an envy-free allocation for these reports is recommended. The complete information non-cooperative outcomes of each of these mechanisms are exactly the envy-free allocations with respect to true preferences if and only if the admissible budget violation coefficients have a bound.

Keywords: Budget constraints; Equitable rent division; Market design; Algorithmic game theory; No-envy; Quasi-linear preferences (search for similar items in EconPapers)
JEL-codes: C72 D63 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:139:y:2023:i:c:p:1-14

DOI: 10.1016/j.geb.2023.01.008

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