On the Core of Markets with Co-ownerships and Indivisibilities

23 Pages Posted: 19 Mar 2020

See all articles by Xiang Sun

Xiang Sun

Wuhan University - Economics and Management School

Qianfeng Tang

Shanghai University of Finance and Economics - School of Economics

Mingjun Xiao

Wuhan University - Economics and Management School

Date Written: February 18, 2020

Abstract

Following Balbuzanov and Kotowski (2019a), we study the exchange of indivisible objects among agents with unit demand, where initially each object is either privately owned or is co-owned by multiple agents. We propose a new notion of core called the effective core for these problems to address the inadequacies of conventional notions of core. We say that a coalition effectively blocks an assignment if it weakly blocks it–as in the definition of the strong core–and the blocking is credible in the sense that no agent in the coalition free-rides on other agents in it. We show that the effective core is a nonempty subset of the weak core and a superset of the strong core, and all assignments in it are Pareto efficient. We also propose an algorithm to find assignments in it. Lastly, we make detailed comparison between the effective core and Balbuzanov and Kotowski’s exclusion core.

Keywords: Core, indivisible objects, top trading cycles

JEL Classification: C78; D61

Suggested Citation

Sun, Xiang and Tang, Qianfeng and Xiao, Mingjun, On the Core of Markets with Co-ownerships and Indivisibilities (February 18, 2020). Available at SSRN: https://ssrn.com/abstract=3540210 or http://dx.doi.org/10.2139/ssrn.3540210

Xiang Sun

Wuhan University - Economics and Management School ( email )

Hubei
China

HOME PAGE: http://www.xiangsun.org

Qianfeng Tang (Contact Author)

Shanghai University of Finance and Economics - School of Economics ( email )

777 Guoding Road
Shanghai, 200433
China

Mingjun Xiao

Wuhan University - Economics and Management School ( email )

Wuhan, Hubei
China

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