Serial Rules in a Multi-Unit Shapley-Scarf Market

Recognition Program

Open Access       

Authors: Péter Biró, Flip Klijn and Szilvia Pápai

Games and Economic Behavior, Vol. 136, 428-453, November, 2022

We study generalized Shapley-Scarf exchange markets where each agent is endowed with multiple units of an indivisible and agent-specific good and monetary compensations are not possible. An outcome is given by a circulation which consists of a balanced exchange of goods. We focus on circulation rules that only require as input ordinal preference rankings of individual goods, and agents are assumed to have responsive preferences over bundles of goods. We study the properties of serial dictatorship rules which allow agents to choose either a single good or an entire bundle sequentially, according to a fixed ordering of the agents. We also introduce and explore extensions of these serial dictatorship rules that ensure individual rationality. The paper analyzes the normative and incentive properties of these four families of serial dictatorships and also shows that the individually rational extensions can be implemented with efficient graph algorithms.

This paper originally appeared as Barcelona School of Economics Working Paper 1255
This paper is acknowledged by the Barcelona School of Economics Recognition Program