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A Two-Step Proportional Rule for Division with Multiple References

Author

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  • A. M. Mármol

    (Universidad de Sevilla)

  • M. A. Hinojosa

    (Universidad Pablo de Olavide)

Abstract

Proportionality is a primary principle generally accepted when dividing a commodity between a set of agents characterized by their reference with respect to a certain characteristic. However, when multiple characteristics have to be taken into account, it is not clear how to define proportionality. We propose a two-step proportional rule for the class of division problems with multiple characteristics. The rule is based on the best expectations of the agents and incorporates the extensions of two crucial properties which are inherent to proportionality: the proportions obtained with respect to the different references cannot be improved simultaneously, and the result does not depend on the scale in which each of the characteristics is measured. We also prove that the two-step proportional rule can be understood as the result of a negotiation in which the Kalai–Smorodinsky solution is applied to a bargaining game between parties each one aiming to maximize the proportions that the set of agents attain with respect to the references of the corresponding characteristic.

Suggested Citation

  • A. M. Mármol & M. A. Hinojosa, 2020. "A Two-Step Proportional Rule for Division with Multiple References," Group Decision and Negotiation, Springer, vol. 29(1), pages 127-141, February.
    • Handle: RePEc:spr:grdene:v:29:y:2020:i:1:d:10.1007_s10726-019-09649-y
    DOI: 10.1007/s10726-019-09649-y
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    References listed on IDEAS

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    1. Juan D. Moreno-Ternero, 2009. "The proportional rule for multi-issue bankruptcy problems," Economics Bulletin, AccessEcon, vol. 29(1), pages 474-481.
    2. M. Hinojosa & A. Mármol & F. Sánchez, 2013. "Extended proportionality in division problems with multiple references," Annals of Operations Research, Springer, vol. 206(1), pages 183-195, July.
    3. Sinan Ertemel & Rajnish Kumar, 2018. "Proportional rules for state contingent claims," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(1), pages 229-246, March.
    4. Ju, Biung-Ghi & Miyagawa, Eiichi & Sakai, Toyotaka, 2007. "Non-manipulable division rules in claim problems and generalizations," Journal of Economic Theory, Elsevier, vol. 132(1), pages 1-26, January.
    5. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
    6. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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