The Core of Housing Markets from an Agent’s Perspective : Is It Worth Sprucing up Your Home?

Schlotter, Ildikó Anna and Biró, Péter and Fleiner, Tamás (2022) The Core of Housing Markets from an Agent’s Perspective : Is It Worth Sprucing up Your Home? In: Web and Internet Economics : 17th International Conference, WINE 2021, Potsdam, Germany, December 14–17, 2021, Proceedings. Lecture Notes in Computer Science . INFORMS, pp. 244-261. ISBN 978-3-030-94675-3 (nyomtatott)

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Abstract

We study housing markets as introduced by Shapley and Scarf. We investigate the computational complexity of various questions regarding the situation of an agent a in a housing market H: we show that it is [Formula: see text]-hard to find an allocation in the core of H in which (i) a receives a certain house, (ii) a does not receive a certain house, or (iii) a receives a house other than a’s own. We prove that the core of housing markets respects improvement in the following sense: given an allocation in the core of H in which agent a receives a house h, if the value of the house owned by a increases, then the resulting housing market admits an allocation in its core in which a receives either h or a house that a prefers to h; moreover, such an allocation can be found efficiently. We further show an analogous result in the Stable Roommates setting by proving that stable matchings in a one-sided market also respect improvement.

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