The undercut procedure: an algorithm for the envy-free division of indivisible items

Steven Brams (), D. Marc Kilgour and Christian Klamler

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: Fair division; allocation of indivisible items; envy-freeness; ultimatum game (search for similar items in EconPapers)
JEL-codes: C72 D63 D74 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-cbe and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: The undercut procedure: an algorithm for the envy-free division of indivisible items (2012)
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