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Manipulation via Endowments in Exchange Markets with Indivisible Goods

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  • Murat Atlamaz
  • Bettina Klaus

Abstract

We consider exchange markets with heterogeneous indivisible goods. We are interested in exchange rules that are efficient and immune to manipulations via endowments (either with respect to hiding or destroying part of the endowment or transferring part of the endowment to another trader). We consider three manipulability axioms: hiding-proofness, destruction-proofness, and transfer-proofness. We prove that no rule satisfying efficiency and hiding-proofness (which implies individual rationality) exists. For two-agent exchange markets with separable and responsive preferences, we show that efficient, individually rational, and destruction-proof rules exist. However, for separable preferences, no rule satisfies efficiency, individual rationality, and destruction-proofness. In the case of transfer-proofness the compatibility with efficiency and individual rationality for the two-agent case extends to the unrestricted domain. For exchange markets with separable preferences and more than two agents no rule satisfies efficiency, individual rationality, and transfer-proofness.
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  • Murat Atlamaz & Bettina Klaus, 2007. "Manipulation via Endowments in Exchange Markets with Indivisible Goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(1), pages 1-18, January.
    • Handle: RePEc:spr:sochwe:v:28:y:2007:i:1:p:1-18
    DOI: 10.1007/s00355-006-0159-2
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    References listed on IDEAS

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    1. Andrew Postlewaite, 1979. "Manipulation via Endowments," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 255-262.
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    8. Tayfun Sonmez, 1999. "Strategy-Proofness and Essentially Single-Valued Cores," Econometrica, Econometric Society, vol. 67(3), pages 677-690, May.
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    Cited by:

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    3. S. Akin & Brennan Platt & Murat Sertel, 2011. "The n-person Kalai-Smorodinsky bargaining solution under pre-donations," Review of Economic Design, Springer;Society for Economic Design, vol. 15(2), pages 147-162, June.
    4. Luis Corchón & Matteo Triossi, 2011. "Implementation with renegotiation when preferences and feasible sets are state dependent," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(2), pages 179-198, February.
    5. Nanyang Bu & Siwei Chen & William Thomson, 2014. "Merging and splitting endowments in object assignment problems," RCER Working Papers 587, University of Rochester - Center for Economic Research (RCER).
    6. Somdeb Lahiri, 2005. "Manipulation via Endowments in a Market with Profit Maximizing Agents," Game Theory and Information 0511008, University Library of Munich, Germany.
    7. Doruk İriş & İpek Özkal-Sanver, 2011. "Manilulation via endowments in university-admission problem," Economics Bulletin, AccessEcon, vol. 31(4), pages 2952-2958.
    8. Vikram Manjunath & Alexander Westkamp, 2025. "Marginal Mechanisms For Balanced Exchange," Papers 2502.06499, arXiv.org.
    9. Thomson, William, 2024. "On the manipulability of allocation rules through endowment augmentation," Games and Economic Behavior, Elsevier, vol. 146(C), pages 91-104.
    10. William Thomson, 2009. "Borrowing-proofness," RCER Working Papers 545, University of Rochester - Center for Economic Research (RCER).
    11. Di Feng, 2023. "Endowments-swapping-proofness and Efficiency in Multiple-Type Housing Markets," Discussion Paper Series DP2023-14, Research Institute for Economics & Business Administration, Kobe University.
    12. Lahiri, Somdeb, 2008. "Manipulation of market equilibrium via endowments," MPRA Paper 10002, University Library of Munich, Germany.
    13. Altuntaş, Açelya & Phan, William & Tamura, Yuki, 2023. "Some characterizations of Generalized Top Trading Cycles," Games and Economic Behavior, Elsevier, vol. 141(C), pages 156-181.
    14. William Thomson, 2024. "Allocation rules are very generally vulnerable to the strategic withholding of endowments," International Journal of Game Theory, Springer;Game Theory Society, vol. 53(3), pages 791-809, September.
    15. de Regt, E.R., 2005. "Overtime and short-time with fluctuating absenteeism and demand," Research Memorandum 027, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    16. William Phan, 2019. "Efficient and incentive compatible exchange of real-time information," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 205-242, March.
    17. Dimitrov, Dinko & Haake, Claus-Jochen, 2011. "Regrouping of endowments in exchange markets with indivisible goods," Center for Mathematical Economics Working Papers 367, Center for Mathematical Economics, Bielefeld University.
    18. Manjunath, Vikram & Westkamp, Alexander, 2021. "Strategy-proof exchange under trichotomous preferences," Journal of Economic Theory, Elsevier, vol. 193(C).
    19. Fujinaka, Yuji & Wakayama, Takuma, 2018. "Endowments-swapping-proof house allocation," Games and Economic Behavior, Elsevier, vol. 111(C), pages 187-202.
    20. Xiang Han & Onur Kesten & M. Utku Ünver, 2021. "Blood Allocation with Replacement Donors: A Theory of Multi-unit Exchange with Compatibility-based Preferences," Boston College Working Papers in Economics 1038, Boston College Department of Economics.
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    22. Schummer, James & Abizada, Azar, 2017. "Incentives in landing slot problems," Journal of Economic Theory, Elsevier, vol. 170(C), pages 29-55.

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    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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