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Manipulation games in economies with indivisible goods

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  • Carmen Beviá

Abstract

In this paper we study the strategic aspects of the No-Envy solution for the problem of allocating a finite set of indivisible goods among a group of agents when monetary compen-sations are possible. In the first part of the paper we consider the case where each agent receives, at most, one indivisible good. We prove that the set of equilibrium allocations of any direct revelation game associated with a subsolution of the No-Envy solution coincides with the set of envy-free allocations for the true preferences. Under manipulation all the subsolutions of the No-Envy solution are equivalent. In the second part of the paper, we allow each agent to receive more than one indivisible good. In this situation the above characterization does not hold any more. We prove that any Equal Income Walrasian allocation for the true preferences can be supported as an equilibrium allocation of any direct revelation game associated with subsolutions of the No-Envy solution, but also non-efficient allocations can be supported.
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  • Carmen Beviá, 2010. "Manipulation games in economies with indivisible goods," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 209-222, March.
    • Handle: RePEc:spr:jogath:v:39:y:2010:i:1:p:209-222
    DOI: 10.1007/s00182-009-0200-7
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    More about this item

    Keywords

    Indivisible goods; Envy-freeness; Direct revelation games; C72; D63; D71;
    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
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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