An equilibrium analysis of Knaster's fair division procedure

DOI10.3390/G4010021MaRDI QIDQ2351206zbMATH OpenOpenAlexFDO

Authors Matt Van Essen

Publication date 23 June 2015

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g4010021

zbMATH Keywords

auctionfair division

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26) Resource and cost allocation (including fair division, apportionment, etc.) (91B32)

Review text

Summary: In an incomplete information setting, we analyze the sealed bid auction proposed by Knaster (cf. [\textit{H. Steinhaus}, ``The problem of fair division, Econometrica 16, 101--104 (1948)]). This procedure was designed to efficiently and fairly allocate multiple indivisible items when participants report their valuations truthfully. In equilibrium, players do not follow truthful bidding strategies. We find that, ex-post, the equilibrium allocation is still efficient but may not be fair. However, on average, participants receive the same outcome they would have received if everyone had reported truthfully -- i.e., the mechanism is ex-ante fair.

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Cites work

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