Farsighted House Allocation

• Authors: Flip Klijn.
• BSE Working Paper: 384 | September 15
• Keywords: top trading cycles , housing markets , indivisible goods , farsightedness , von Neumann-Morgenstern stable sets , competitive allocations
• JEL codes: D63, D70
• top trading cycles
• housing markets
• indivisible goods
• farsightedness
• von Neumann-Morgenstern stable sets
• competitive allocations

In this note we study von Neumann-Morgenstern farsightedly stable sets for Shapley and Scarf (1974) housing markets. Kawasaki (2008) shows that the set of competitive allocations coincides with the unique von Neumann-Morgenstern stable set based on a farsighted version of antisymmetric weak dominance (cf., Wako, 1999). We demonstrate that the set of competitive allocations also coincides with the unique von Neumann-Morgenstern stable set based on a farsighted version of strong dominance (cf., Roth and Postlewaite, 1977) if no individual is indifferent between his endowment and the endowment of someone else.