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How to Efficiently Allocate Houses under Price Controls?

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Author

Summary, in English

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.

Publishing year

2014

Language

English

Publication/Series

Working Paper / Department of Economics, School of Economics and Management, Lund University

Volume

24

Document type

Working paper

Publisher

Department of Economics, Lund University

Topic

  • Economics

Keywords

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

Status

Published