How to Efficiently Allocate Houses under Price Controls?

Tommy Andersson, Zaifu Yang, Dongmo Zhang

Research output: Working paper/PreprintWorking paper

Abstract

Price controls are used in many regulated markets and well recognized as the cause of market inefficiency. This paper examines a practical housing market in the presence of price controls and provides a solution to the problem of how houses should be efficiently allocated among agents through a system of prices. We demonstrate that the dynamic auction by Talman and Yang (2008) always finds a core allocation in finitely many iterations, thus resulting in a Pareto efficient outcome.
Original languageEnglish
PublisherDepartment of Economics, Lund University
Number of pages17
Volume24
Publication statusPublished - 2014

Publication series

NameWorking Paper / Department of Economics, School of Economics and Management, Lund University
Volume24

Subject classification (UKÄ)

  • Economics

Keywords

  • Ascending auction
  • assignment market
  • price control
  • Pareto efficiency
  • core

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