Saturday, May 18, 2024

Top Trading Cycles (TTC) is characterized by strategy proofness and individual rationality on a large set, by Özgün Ekici

 Here's a very nice result about TTC:

 Pair-efficient reallocation of indivisible objects, by Özgün Ekici, Theoretical Economics 19 (2024), 551–564

Abstract: We revisit the classical object reallocation problem under strict preferences. When attention is constrained to the set of Pareto-efficient rules, it is known that top trading cycles (TTC) is the only rule that is strategyproof and individually-rational. We relax this constraint and consider pair-efficiency. A rule is pair-efficient if it never induces an allocation at which a pair of agents gain from trading their assigned objects. Remarkably, even in the larger set of pair-efficient rules, we find that TTC is still the only rule that is strategyproof and individually-rational. Our characterization result gives strong support to the use of TTC in object reallocation problems.

No comments: