Pair rationality and top trading cycles on single-peaked and single-dipped domains

Abstract

In a recent study, Ekici and Yenmez (2026) characterize top trading cycles (TTC) on the unrestricted domain by strategy-proofness, individual rationality, and pair rationality, uncovering a correspondence between the axiomatic foundations of TTC and deferred acceptance, matching theory's two canonical rules. We show that their characterization fails on the single-peaked domain, but it holds on the single-dipped domain even without strategy-proofness. They also show that pair rationality can be replaced in their characterization by two weaker conditions concerning agents' first and second choices. In contrast, this replacement fails on the single-dipped domain, even when strategy-proofness is imposed.