Games of fair division

Abstract

We consider the problem of fairly allocating an indivisible good to one of several agents equally entitled to it when monetary compensations to the others are possible. Our primary normative concept is no-envy. First, we show that there is no non-manipulable selection from the no-envy solution. Then we study the direct revelation games associated with subsolutions of the no-envy solution. The set of equilibrium allocations of any one of them coincides with the set of envy-free allocations for the true preferences. Journal of Economic Literature Classification Numbers: C72, D63, D7l, D82. © 1995 Academic Press. All rights reserved.