A Graph Theoretic Approach to Markets for Indivisible Goods
Speaker: Andrew Caplin, New York University
Location: Warren Weaver Hall 1302
Date: October 29, 2010, 11:30 a.m.
Host: Yann LeCun
Graph theoretic techniques are important in markets for indivisible goods. A famous example is the application of Hall's theorem in the study of equilibrium outcomes in various matching markets. The typical setting involves "transferable utility", which has the effect of treating match utilities as independent of the equilibrium outcome. Standard techniques break down in the non-transferable utility case, since the value of a match then depends on the equilibrium outcome. A case in point is the housing market, in which prices of houses have differential impact of the utilities of rich as opposed to poor individuals. We develop graph theoretic techniques to solve for equilibria in markets for indivisible goods when utility is non-transferable. These techniques form the basis for algorithms to compute the equilibria.
Andrew Caplin is a professor of economics at New York University and the co-director of NYUâ€™s Center for Experimental Social Science. He received his BA from Cambridge University, his Ph.D. from Yale in 1983, and has had previous academic appointments at Harvard, Princeton, and Columbia Universities. He serves as Co-Editor of the Oxford University Press series â€œMethods of Modern Economicsâ€, on the Steering Committee of the Health and Retirement Survey, and as a Fellow of the Econometric Society. His research covers a wide range of topics: psychology and economics; neuroeconomics; macroeconomic theory; microeconomic theory; and the economics of residential real estate and real estate finance. He has longstanding interest in the economic impact of indivisibilities, dating back to his Ph.D under the supervision of Professor Herbert Scarf.
Refreshments will be offered starting 15 minutes prior to the scheduled start of the talk.