Divide and compromise

Antonio Nicolò, Rodrigo A. Velez*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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Abstract

We introduce two symmetrized versions of the popular divide-and-choose mechanism for the allocation of a collectively owned indivisible good between two agents when monetary compensation is available. Our proposals retain the simplicity of divide-and-choose and correct its ex-post asymmetry. When there is complete information, i.e., agents know each other well, both mechanisms implement in subgame perfect equilibria a unique allocation that would be obtained by a balanced market. The results hold for general continuous preferences that may not be quasi-linear.

Original languageEnglish
JournalMathematical social sciences
Volume90
Early online date28 Apr 2017
DOIs
Publication statusPublished - Nov 2017

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