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Equitable rent division on a soft budget

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  • Velez, Rodrigo A.

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.

Suggested Citation

  • Velez, Rodrigo A., 2023. "Equitable rent division on a soft budget," Games and Economic Behavior, Elsevier, vol. 139(C), pages 1-14.
    • Handle: RePEc:eee:gamebe:v:139:y:2023:i:c:p:1-14
    DOI: 10.1016/j.geb.2023.01.008
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    References listed on IDEAS

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    1. Nicolò, Antonio & Velez, Rodrigo A., 2017. "Divide and compromise," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 100-110.
    2. Rodrigo A. Velez, 2017. "Sharing an increase of the rent fairly," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(1), pages 59-80, January.
    3. Fujinaka, Yuji & Wakayama, Takuma, 2015. "Maximal manipulation of envy-free solutions in economies with indivisible goods and money," Journal of Economic Theory, Elsevier, vol. 158(PA), pages 165-185.
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    More about this item

    Keywords

    Budget constraints; Equitable rent division; Market design; Algorithmic game theory; No-envy; Quasi-linear preferences;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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