Date of This Version
August 2009
Abstract
While most of the literature starting with Shapley and Scarf (1974) have considered a static exchange economy with indivisibilities, this paper studies the dynamics of such an economy. We find that both the dynamics generated by competitive equilibrium and the one generated by weakly dominance relation, converge to a set of allocations we define as strictly stable, which we can show to exist. Moreover, we show that even when only pairwise exchanges between two traders are allowed, the strictly stable allocations are attained eventually if traders are sufficiently farsighted.
Recommended Citation
Kamijo, Yoshio and Kawasaki, Ryo, "Dynamics, Stability, and Foresight in the Shapley-Scarf Housing Market" (August 05, 2009). Fondazione Eni Enrico Mattei Working Papers. Paper 312.
https://services.bepress.com/feem/paper312