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Fair Division with Money and Prices

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  • Anna Bogomolnaia
  • Herve Moulin

Abstract

We must divide a finite number of indivisible goods and cash transfers between agents with quasi-linear but otherwise arbitrary utilities over the subsets of goods. We compare two division rules with cognitively feasible and privacy preserving individual messages. In Sell&Buy agents bid for the role of Seller or Buyer: with two agents the smallest bid defines the Seller who then charges any a price constrained only by her winning bid. In Divide&Choose agents bid for the role of Divider, then everyone bids on the shares of the Divider's partition. S&B dominates D&C on two counts: its guaranteed utility in the worst case rewards (resp. penalises) more subadditive (resp. superadditive) utilities; playing safe is never ambiguous and is also better placed to collect a larger share of the efficient surplus.

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  • Anna Bogomolnaia & Herve Moulin, 2022. "Fair Division with Money and Prices," Papers 2202.08117, arXiv.org.
    • Handle: RePEc:arx:papers:2202.08117
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    References listed on IDEAS

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    Cited by:

    1. Dall’Aglio, Marco, 2023. "Fair division of goods in the shadow of market values," European Journal of Operational Research, Elsevier, vol. 307(2), pages 785-801.

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