Fair Division with Money and Prices

Anna Bogomolnaia and Herve Moulin

Papers from arXiv.org

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.

Date: 2022-02
New Economics Papers: this item is included in nep-ban, nep-des and nep-upt
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2202.08117

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