We propose a procedure for dividing indivisible items between two players in which each player ranks the items from best to worst and has no information about the other player’s ranking. It ensures that each player receives a subset of items that it values more than the other player’s complementary subset, given that such an envy-free division is possible. We show that the possibility of one player’s undercutting the other’s proposal, and implementing the reduced subset for himself or herself, makes the proposer “reasonable” and generally leads to an envy-free division, even when the players rank items exactly the same. Although the undercut procedure is manipulable, each player’s maximin strategy is to be truthful. Applications of the undercut procedure are briefly discussed.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
12774.
Find related papers by JEL classification: D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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Brams, S.J. & Kilgour, D.M., 1999.
"Competitive Fair Division,"
Working Papers
99-05, C.V. Starr Center for Applied Economics, New York University.
[Downloadable!]
Brams, S. J. & Eldelman, P. H. & Fishburn, P. C., 2000.
"Fair Division of Indivisible Items,"
Working Papers
00-15, C.V. Starr Center for Applied Economics, New York University.
[Downloadable!]
Brams, S. J. & Eldelman, P. H. & Fishburn, P. C., 2000.
"Paradoxes of Fair Division,"
Working Papers
00-13, C.V. Starr Center for Applied Economics, New York University.
[Downloadable!]