2021/06/28 by Yajing Chen, Zhenhua Jiao, Chen, Yajing +4
Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #FOS: Economics and business #Game Theory and Voting Systems #Housing Market and Economics #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2106.14456
openalex publication_date 2021/06/28 · openalex created_date 2021/07/05 · openalex updated_date 2026/07/28
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.