The Machiavellian frontier of top trading cycles

Yajing Chen, Zhenhua Jiao, Chenfeng Zhang and Luosai Zhang

Papers from arXiv.org

Abstract: This paper studies the housing market problem introduced by Shapley and Scarf (1974). We probe the Machiavellian frontier of the well-known top trading cycles (TTC) rule by weakening strategy-proofness and providing new characterizations for this rule. Specifically, our contribution lies in three aspects. First, we weaken the concept of strategy-proofness and introduce a new incentive notion called truncation-invariance, where the truthful preference-reporting assignment cannot be altered by any agent through misreporting a truncation of the true preference at the assignment produced by the true preference unilaterally. Second, we characterize the TTC rule by the following three groups of axioms: individual rationality, pair-efficiency, truncation-invariance; individual rationality, Pareto efficiency, truncation-invariance; individual rationality, endowments-swapping-proofness, truncation-invariance.1 The new characterizations refine several previous results.2 Third, we show through examples that the characterization results of Takamiya (2001) and Miyagawa (2002) can no longer be obtained if strategy-proofness is replaced with truncation-invariance.

Date: 2021-06, Revised 2024-04
New Economics Papers: this item is included in nep-des and nep-ure
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Citations: View citations in EconPapers (1)

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