Competitive equilibria in Shapley–Scarf markets with couples

Abstract

We investigate the existence and properties of competitive equilibrium in Shapley-Scarf markets involving an exogenous partition of individuals into couples. The presence of couples generates preference interdependencies which cause existence problems. For both cases of transferable and non-transferable income among partners, we establish properties for preferences that are sufficient for the existence of an equilibrium. Moreover, we show that these properties define a maximal preference domain.

On the integration of Shapley–Scarf markets

“…2 We only consider the case where agents have strict preferences; for an analysis of housing markets with weak preferences, see Quint and Wako (2004); Alcalde-Unzu and Molis (2011); Aziz and De Keijzer (2012); Jaramillo and Manjunath (2012); Saban and Sethuraman (2013) and Aslan and Lainé (2020).…”