Before revision: We design envy-free mechanisms for the allocation of rooms and rent payments among roommates. We achieve four objectives: (1) each agent is allowed to make a report that expresses her preference about violating her budget constraint, a feature not achieved by mechanisms that only elicit quasi-linear reports; (2) these reports are finite dimensional; (3) computation is feasible in polynomial time; and (4) incentive properties of envy-free mechanisms that elicit quasi-linear reports are preserved .
After revision: We design envy-free mechanisms for the allocation of rooms and payments of rent among financially constrained roommates. Each agent reports her values for rooms, her housing earmark (soft budget), and an index that reflects the difficulty the agent experiences from having to pay over this amount. Then an envy-free allocation for these reports is recommended. We identify conditions under which the complete information non-cooperative outcomes of these mechanisms are exactly the envy-free allocations with respect to true preferences .