Stability of an allocation of objects

Abstract

A central stability notion for allocation problems when there are private endowments is core: no coalition should be able to block the allocation. But, for an exchange economy of discrete resources, core can be empty. An alternative stability axiom is the bargaining set a la Aumann and Maschler (Advances in game theory, Annals of mathematics studies, Princeton University Press, Princeton, pp 443-476, 1964): a blocking by a coalition is justified only if there is no counter-objection to it and an allocation is in the bargaining set if there does not exist a justified blocking. Allowing for weak preferences, we prove that any allocation obtained by the well-known Top Trading Cycles class is in the bargaining set, but not all allocations in the bargaining set can be obtained by this class.