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Are fairness and efficiency compatible in behavioral welfare economics? Assuming multi-self agents, who may not be able to integrate their various objectives into complete and transitive rankings, we call an allocation unambiguously-fair if it fair according to every self of every agent. We show that efficiency is generically compatible with the unambiguous fair-share guarantee, and — in two agent economies — with unambiguous no-envy. But in some larger economies, no efficient allocation satisfies unambiguous no-envy or unambiguous egalitarian equivalence. These non-existence results persist if the agents integrate their objectives into complete but intransitive rankings. Even if unambiguously envy-free Pareto optima exist, they may not arise as market equilibria from equal endowments. Finally, we show that there are Pareto optima with the unambiguous fair-share guarantee that are envy-free for at least one complete and transitive aggregation of the agents' preferences, and others that are egalitarian-equivalent according to at least one such aggregation. [ABSTRACT FROM AUTHOR]

The Fisher market is one of the most fundamental models for resource allocation. However, Fisher markets are less amenable for resource allocation settings when agents have additional linear constraints beyond the budget constraints of buyers and the capacity constraints of goods. Thus, in this work, we introduce a modified Fisher market, where agents may have additional linear constraints, and study the properties of the resulting equilibria. To set equilibrium prices, we introduce a budget-adjusted social optimization problem (BA-SOP), whose optimal dual variables correspond to the equilibrium prices. Since solving BA-SOP can be computationally intensive and requires centralized knowledge of all agents' utilities, we propose a new class of distributed algorithms based on the Alternating Direction Method of Multipliers (ADMM) to compute equilibrium prices. Our ADMM approach has strong convergence guarantees and provides a general-purpose method for computing market equilibria for Fisher markets with homogeneous linear constraints and classical Fisher markets. [ABSTRACT FROM AUTHOR]

We study combinatorial auctions with bidders that exhibit an endowment effect. In most of the previous work on cognitive biases in algorithmic game theory the focus was on analyzing the implications and mitigating their negative consequences. In contrast, in this paper we show how in some cases cognitive biases can be harnessed to obtain better outcomes. Specifically, we study Walrasian equilibria in combinatorial markets. It is well known that Walrasian equilibria exist only in limited settings, e.g., when all valuations are gross substitutes, but fail to exist in more general settings, e.g., when the valuations are submodular. Our main result shows that when the valuations are submodular, even a mild degree of endowment effect is sufficient to guarantee the existence of Walrasian equilibria. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic induced an increase in both the amount of time that households spend at home and the share of expenditures allocated to at-home consumption. These changes coincided with a period of rapidly rising house prices. We interpret these facts as the result of stay-at-home shocks that increase demand for goods consumed at home as well as the homes that those goods are consumed in. We first test the hypothesis empirically using US cross-county panel data and instrumental variables regressions. We find that counties where households spent more time at home experienced faster increases in house prices. We then study various pandemic shocks using a heterogeneous agent model with general equilibrium in housing markets. Stay-at-home shocks explain around half of the increase in model house prices in 2020. Lower mortgage rates explain around one third of the price rise, while unemployment shocks and fiscal stimulus have relatively small effects on house prices. We find that young households and first-time home buyers account for much of the increase in housing demand during the pandemic, but they are largely crowded out of the housing market by the equilibrium rise in house prices. • The COVID-19 pandemic increased time spent at home and consumption of at-home goods. • The COVID-19 pandemic also saw a rapid increase in house prices. • Strong empirical correlation between time/consumption at home and house prices. • We build a heterogeneous agent model of the housing market to study pandemic shocks. • Stay-at-home shocks explain almost half of the increase in house prices in the model. [ABSTRACT FROM AUTHOR]

In a Fisher market, the market maker sells m products to n potential agents. The agents submit their utility functions and money endowments to the market maker, who, upon receiving submitted information, derives market equilibrium prices and allocations of the products. Agents are self-interested entities who wish to maximize their utility, and they may misreport their private information for this purpose. The incentive ratio characterizes the extent to which strategic plays can increase an agent's utility. While agents do benefit by misreporting their private information, we show that the ratio of improvement by a unilateral strategic play is no more than two in markets with gross substitute utilities for the agents. Moreover, it can be pinned down to e 1 / e ≈ 1.445 in Cobb-Douglas markets. For the Leontief markets in which products are complementary, we show that the incentive ratio is at most two as well. [ABSTRACT FROM AUTHOR]