Applications

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Properties of Fariness

The divide-and-choose game

In the divide-and-choose game, each player can insure that he does not envy the other.

Strategy #1

• The "divider" (D):
  • divides the goods so that he is indifferent to the chooser's choice. That is, he divides the bundle so that he himself is indifferent between the resultant bundles.
    
    
• The "chooser" (C):
  • After D establishes the bundles, C need only choose his most preferred bundle.
    
    

Strategy #2

If the divider is certain of the chooser's preferences...

• The "divider" (D):
  • divides the goods so that the chooser is indifferent between the resultant bundles.
    
    
• The "chooser" (C):
  • Can be counted on to choose the bundle that D would prefer him to choose.