Fair Divisions as Attracting Nash Equilibria of Simple Games

Marco Galbiati

No ECO2006/24, Economics Working Papers from European University Institute

Abstract: We consider the problem of allocating a finite number of divisible homogeneous goods to N = 2 individuals, in a way which is both envy-free and Pareto optimal. Building on Thomson (2005 Games and Economic Behavior), a new simple mechanism is presented here with the following properties: a) the mechanism fully implements the desired divisions, i.e. for each preference profile the set of equilibrium outcomes coincides with the set of fair divisions; b) the set of equilibria is a global attractor for the best-reply dynamics. Thus, players myopically adapting their strategies settle down in an fair division. The result holds even if mixed strategies are used.

Keywords: Fair divisions; envy-free; implementation; best reply dynamics (search for similar items in EconPapers)
JEL-codes: C73 C78 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-gth
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Citations: View citations in EconPapers (2)

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Journal Article: Fair divisions as attracting Nash equilibria of simple games (2008)
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