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Manipulation Games in Economics 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.

Suggested Citation

  • Carmen Beviá, 2009. "Manipulation Games in Economics with Indivisible Goods," Working Papers 371, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:371
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    References listed on IDEAS

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    Cited by:

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    4. Velez, Rodrigo A., 2011. "Are incentives against economic justice?," Journal of Economic Theory, Elsevier, vol. 146(1), pages 326-345, January.

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    More about this item

    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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