Template-type: ReDif-Paper 1.0
Author-Name: Klaus,Bettina
Author-workplace-name: METEOR
Title: The Coordinate-Wise Core for Multiple-Type Housing Markets is Second-Best Incentive Compatible
Abstract: We consider the generalization of Shapley and Scarf''s (1974) model of trading indivisible objects (houses) to so-called multiple-type housing markets. We show (Theorem 1) that the prominent solution for these markets, the coordinate-wise core rule, is second-best incentive compatible. In other words, there exists no other strategy-proof trading rule that Pareto dominates the coordinate-wise core rule. Given that for multiple-type housing markets Pareto efficiency, strategy-proofness, and individual rationality are not compatible, by Theorem 1 we show that applying the coordinate-wise core rule is a minimal concession with respect to Pareto efficiency while preserving strategy-proofness and individual rationality.
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2005
Number: 018
File-URL: http://edocs.ub.unimaas.nl/loader/file.asp?id=1064
File-Format: application/pdf
File-Size: 226451
Handle: RePEc:unm:umamet:2005018