Constrained optimal transport with an application to large markets with indivisible goods
Theoretical Economics
2026-04-06 v1
Abstract
We establish a variant of Monge--Kantorovich duality for a constrained optimal transport problem with a continuum of agents, a finite set of alternatives, and general linear constraints. As an application, we revisit the large-market model of indivisible goods in Azevedo et al. (2013), identify a flaw in the original equilibrium-existence proof stemming from an incorrect compactness claim, and recover equilibrium existence via our duality approach. We also characterize equilibrium prices as minimizers of a potential function, which yields a method for computing equilibrium prices.
Keywords
Cite
@article{arxiv.2604.02559,
title = {Constrained optimal transport with an application to large markets with indivisible goods},
author = {Koji Yokote},
journal= {arXiv preprint arXiv:2604.02559},
year = {2026}
}