Top trading with fixed tie-breaking in markets with indivisible goods

Lars Ehlers

Journal of Economic Theory, 2014, vol. 151, issue C, 64-87

Abstract: We study markets with indivisible goods where monetary compensations are not possible. Each individual is endowed with an object and a preference relation over all objects. When preferences are strict, Gale's top trading cycles algorithm finds the unique core allocation. When preferences are not necessarily strict, we use an exogenous profile of tie-breakers to resolve any ties in individuals' preferences and apply Gale's top trading cycles algorithm for the resulting profile of strict preferences. We provide a foundation of these simple extensions of Gale's top trading cycles algorithm from strict preferences to weak preferences. We show that Gale's top trading cycles algorithm with fixed tie-breaking is characterized by individual rationality, strategy-proofness, weak efficiency, non-bossiness, and consistency. Our result supports the common practice in applications to break ties in weak preferences using some fixed exogenous criteria and then to use a “good and simple” rule for the resulting strict preferences.

Keywords: Indivisible goods; Top trading cycles; Indifferences; Fixed tie-breaking (search for similar items in EconPapers)
JEL-codes: C78 D63 D70 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Working Paper: Top Trading with Fixed Tie-Breaking in Markets with Indivisible Goods (2012)
Working Paper: Top Trading with Fixed Tie-Breaking in Markets with Indivisible Goods (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:151:y:2014:i:c:p:64-87

DOI: 10.1016/j.jet.2013.12.011

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