Dynamics, stability, and foresight in the Shapley-Scarf housing market

Yoshio Kamijo, Ryo Kawasaki

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

While most of the literature starting with Shapley and Scarf (1974) have considered a static exchange economy with indivisibilities, this paper studies the dynamics of such an economy. We find that both the dynamics generated by competitive equilibrium and the one generated by the weak dominance relation, converge to a set of allocations we define as strictly stable, which we can show to exist. Moreover, we show that even when only pairwise exchanges between two traders are allowed, the strictly stable allocations are attained eventually if traders are sufficiently farsighted.

Original languageEnglish
Pages (from-to)214-222
Number of pages9
JournalJournal of Mathematical Economics
Volume46
Issue number2
DOIs
Publication statusPublished - 2010 Mar 20

Keywords

  • Competitive allocation
  • Dynamics
  • Foresight
  • Indivisible goods market
  • Stable set
  • Strict core

ASJC Scopus subject areas

  • Economics and Econometrics
  • Applied Mathematics

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