Parkes, DavidGreen, Samuel Lewis2019-04-042017-052017-07-142017Green, Samuel Lewis. 2017. Generalized Top Trading Cycles: An Iterative Approach for Exchange Economies With Money. Bachelor's thesis, Harvard College.http://nrs.harvard.edu/urn-3:HUL.InstRepos:38988983Exchange economies for indivisible items and with initial ownership typically require the absence of money when agents interact. By excluding money, the previously proposed models ignore a rich class of problems with broad practical applicability. I therefore present an exchange economy model with indivisibilities, initial ownership, and money. I focus on constructing a mechanism that does not run a deficit and that guarantees at least a constant approximation of welfare, properties that the previous and well-known Vickrey-Clarke-Groves (VCG) and top trading cycles (TTC) mechanisms, respectively, do not satisfy. By extending the well-known Myerson-Satterthwaite impossibil- ity, I show that no mechanism can be simultaneously no-deficit and approximately efficient while also guaranteeing that agents will be willing to participate and report their preferences truthfully. Following common practice among practical mechanism designers, I then relax strategy-proofness and propose a novel mechanism, NetAscendingClock, that takes an iterative approach to find exactly efficient equilibrium solutions. I prove that NetAscendingClock is both computation- ally tractable and game theoretically reasonable. Finally, I experimentally verify both that VCG and TTC’s undesirable properties manifest themselves in practice and that NetAscendingClock addresses the shortcomings of both of these when participants submit truthful preferences.application/pdfenComputer ScienceEconomics, TheoryThesis or Dissertation2019-04-04