TITLE:
Cycles and Rationalization
AUTHORS:
Patrick de Lamirande
KEYWORDS:
Indivisible Goods; Cycle; Rationalizability; Pareto Allocations
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.6,
December
20,
2013
ABSTRACT:
This paper studies the composition
of the Paretian allocation set in the context of a finite number of agents and
a finite number of indivisible goods. Each agent receives at most one good and
no monetary compensation is possible (typically called the house allocation
problem). I introduce the concept of a cycle which is a sequence of allocations
where each allocation is linked to the following allocation in the sequence by
the same switch of goods between a subset of agents. I characterize the
profiles of agent preferences when the Paretian set has cycles.