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The Fair and Efficient Division of the Winsor Family Silver

Author

Listed:
  • John Winsor Pratt

    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

  • Richard Jay Zeckhauser

    (John F. Kennedy School of Government, Harvard University, 79 John F. Kennedy Street, Cambridge, Massachusetts 02138)

Abstract

This is the true story of the actual use of a formal, decentralized division procedure to allocate silver heirlooms among eight grandchildren fairly and efficiently without distasteful direct monetary payments. Each grandchild's stated preferences for objects in contention were roughly represented by a von Neumann-Morgenstern utility function. Allocations were made as they would be in a market for probability shares in the objects, assuming each grandchild had a fixed amount of an artificial currency and made optimal purchases. The market-clearing equilibrium prices were chosen as in a second-price auction to reward honest reporting. Although the procedure was decentralized and most participants did not fully understand it or the preference information desired, it handled all major considerations well and was regarded as equitable.

Suggested Citation

  • John Winsor Pratt & Richard Jay Zeckhauser, 1990. "The Fair and Efficient Division of the Winsor Family Silver," Management Science, INFORMS, vol. 36(11), pages 1293-1301, November.
    • Handle: RePEc:inm:ormnsc:v:36:y:1990:i:11:p:1293-1301
    DOI: 10.1287/mnsc.36.11.1293
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    Citations

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    Cited by:

    1. Moshe Babaioff & Noam Nisan & Inbal Talgam-Cohen, 2021. "Competitive Equilibrium with Indivisible Goods and Generic Budgets," Mathematics of Operations Research, INFORMS, vol. 46(1), pages 382-403, February.
    2. Arnaud De Bruyn & Gary E. Bolton, 2008. "Estimating the Influence of Fairness on Bargaining Behavior," Management Science, INFORMS, vol. 54(10), pages 1774-1791, October.
    3. Shell, Karl & Wright, Randall, 1993. "Indivisibilities, Lotteries, and Sunspot Equilibria," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(1), pages 1-17, January.
    4. Kyropoulou, Maria & Ortega, Josué & Segal-Halevi, Erel, 2022. "Fair cake-cutting in practice," Games and Economic Behavior, Elsevier, vol. 133(C), pages 28-49.
    5. Anna Bogomolnaia & Hervé Moulin & Fedor Sandomirskiy & Elena Yanovskaya, 2017. "Competitive Division of a Mixed Manna," Econometrica, Econometric Society, vol. 85(6), pages 1847-1871, November.
    6. Nolan Miller & Alexander Wagner & Richard Zeckhauser, 2013. "Solomonic separation: Risk decisions as productivity indicators," Journal of Risk and Uncertainty, Springer, vol. 46(3), pages 265-297, June.
    7. Yigal Gerchak, 2008. "Decision-Analytic Approach to Knockout Auctions," Decision Analysis, INFORMS, vol. 5(1), pages 19-21, March.
    8. John Pratt, 2007. "Fair (and not so fair) division," Journal of Risk and Uncertainty, Springer, vol. 35(3), pages 203-236, December.
    9. Michael H. Rothkopf, 1998. "Editorial: Personal OR/MS," Interfaces, INFORMS, vol. 28(4), pages 13-14, August.
    10. Xiaotie Deng & Qi Qi & Amin Saberi, 2012. "Algorithmic Solutions for Envy-Free Cake Cutting," Operations Research, INFORMS, vol. 60(6), pages 1461-1476, December.
    11. Anna Bogomolnaia & Herve Moulin & Fedor Sandomirskiy & Elena Yanovskaya, 2016. "Dividing Goods or Bads Under Additive Utilities," HSE Working papers WP BRP 147/EC/2016, National Research University Higher School of Economics.
    12. Arthur Carvalho & Kate Larson, 2012. "Sharing Rewards Among Strangers Based on Peer Evaluations," Decision Analysis, INFORMS, vol. 9(3), pages 253-273, September.
    13. Maria Kyropoulou & Josu'e Ortega & Erel Segal-Halevi, 2018. "Fair Cake-Cutting in Practice," Papers 1810.08243, arXiv.org, revised Feb 2022.
    14. James E. Smith & Detlof von Winterfeldt, 2004. "Anniversary Article: Decision Analysis in Management Science," Management Science, INFORMS, vol. 50(5), pages 561-574, May.

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