March 1, 2013, 13:45–15:00
Toulouse
Room MF 323
Decision Mathematics Seminar
Abstract
In many real-life house allocation problems, rents are bounded from above by price ceilings imposed by the government or a local administration. This is known as rent control. Because some price equilibria may be disqualified given such restrictions, a weaker equilibrium concept is suggested. Given the weaker notion, this paper defines an allocation mechanism, tailored to capture the specific features of housing markets with rent control, which always selects a weak price equilibrium. The main results demonstrate the existence of a weak price equilibrium and that the introduced allocation mechanism is efficient and non-manipulable for any given price ceiling. In its two bounding cases, the mechanism reduces to the weak version of the serial dictatorshipmechanism (Svensson, 1994) and the competitive price mechanism (Demange and Gale, 1985), respectively. In this sense, the housing market with rent control, investigated in this paper, integrates two of the predominant models in the two-sided matching literature into a more general framework.
Keywords
House allocation; rent control; rationing; weak price equilibrium; priority efficiency; non-manipulability;