Extend the model of the jungle to the case in which the number of houses is smaller than the number of agents. In this case, an allocation is a function from the set of agents to the set HU {homeless} with the property that no two agents are assigned to the same house. Each agent has a preference ordering over H U {homeless}. Assume that this ordering is strict; assume also that every agent prefers to be allocated any house than to be homeless. Define an equilibrium for this extended model and show that it always exists.

Extend the model of the jungle to the case in which the number of houses is smaller than the number of agents. In this case, an allocation is a function from the set of agents to the set HU {homeless} with the property that no two agents are assigned to the same house. Each agent has a preference ordering over H U {homeless}. Assume that this ordering is strict; assume also that every agent prefers to be allocated any house than to be homeless. Define an equilibrium for this extended model and show that it always exists.

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Chapter1: Making Economics Decisions

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

Extend the model of the jungle to the case in which the number of houses is smaller than the number of agents. In
this case, an allocation is a function from the set of agents to the set H U {homeless} with the property that no
two agents are assigned to the same house. Each agent has a preference ordering over H U {homeless}. Assume
that this ordering is strict; assume also that every agent prefers to be allocated any house than to be homeless.
Define an equilibrium for this extended model and show that it always exists.

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