Endowments-Swapping-Proof House Allocation

We consider house (re)allocation problems (Shapley and Scarf, 1974) with strict preferences. We are concerned with the possibility that a pair of agents may gain by swapping their endowments before the operation of the chosen rule. A rule is called endowments-swapping-proof if it is immune to this kind of manipulation. Our main result is that the top trading cycles rule is the only rule that satisfies individual rationality, strategy-proofness, and endowments-swapping-proofness.

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