Maximal Domains for Strategy-Proof Pairwise Exchange

Abstract

We analyze centralized non-monetary markets for indivisible objects through pairwise exchange when each agent initially owns a single object. We characterize a family of do- mains of preferences (minimal reversal domains) such that there exist pairwise exchange rules that satisfy individual rationality, efficiency, and strategy-proofness. Minimal reversal domains are maximal rich domains for individual rationality, efficiency, and strategy- proofness. Each minimal reversal domain is defined by a common ranking of the set of objects, and agents’ preferences over admissible objects coincide with such common rank- ing but for a specific pair of objects.