INSTITUTE OF MATHEMATICAL ECONOMICS

Claus-Jochen Haake, Matthias G. Raith, Francis E. Su

Working-Paper No. 311

Sept. 1999/Feb. 2000

Abstract

We develop a procedure for implementing an efficient and envy-free allocation of m objects among n individuals with the possibility of monetary side-payments. The procedure eliminates envy by compensating envious players. It is fully descriptive and says explicitly which compensations should be made, and in what order. Moreover, it is simple enough to be carried out without computer support. We formally characterize the properties of the procedure, show how it establishes envy-freeness with minimal resources, and demonstrate its application to a wide class of fair-division problems.

Keywords: fair-division procedures, envy-freeness

The Paper in PDF-Format to view with Adobe Acrobat Reader^®. WP311b.pdf ( 249k)

Get free Adobe Acrobat Reader^® here!