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- Title
An alternative characterization of top trading cycles.
- Authors
Morrill, Thayer
- Abstract
This paper introduces two new characterizations of the top trading cycles algorithm. The key to our characterizations is a new condition, independence of irrelevant rankings (IIR). Intuitively, a mechanism satisfies IIR if whenever an agent's ranking at an object is irrelevant to her assignment, then it is irrelevant to the assignment of all agents. We demonstrate that a mechanism is Pareto efficient, strategy-proof, IIR, and satisfies mutual best if and only if it is top trading cycles. This provides a new insight into what distinguishes top trading cycles from all other efficient and strategy-proof assignment mechanisms. We provide a second characterization in terms of weak Maskin monotonicity. A mechanism satisfies Pareto efficiency, weak Maskin monotonicity, IIR, and mutual best if and only if it is top trading cycles. This allows us to directly compare top trading cycles to known characterizations of the deferred acceptance algorithm in terms of weak Maskin monotonicity.
- Subjects
STRATEGIC planning; ALGORITHMS; ECONOMIC efficiency; INDEPENDENCE (Mathematics); MONOTONIC functions; BUSINESS cycles
- Publication
Economic Theory, 2013, Vol 54, Issue 1, p181
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-012-0713-3