Fair Division Fair Division Problem A problem that

Fair Division • Fair Division Problem: A problem that involves the dividing up of an object or set of objects among several individuals (players) so that each individual considers the part he or she receives to be a fair portion. • Assumptions: – Cooperation: players are willing participants – Rationality: players are rational – Privacy: players have no info on other players – Symmetry : players have equal rights copyright 2005 Dr. Annette M. Burden 1

Fair Division - Objectives 1. Fair Share: each of the N individuals gets what he/she considers a fair 1/N portion of the whole. 1. What may be considered a fair share by 1 player may not be considered a fair share by another player 2. It is possible for a player to get a fair share portion but not the preferred piece. 2. Envy Free: Each player gets a piece of the whole that he/she considers is the best share copyright 2005 Dr. Annette M. Burden 2

Fair Division - Types Origins go back 5, 000 years. Modern era of fair division in math began in Poland during WWII 1. Continuous: The item(s) can be divided many ways & by small amounts (pie, cake, land, etc. ) 2. Discrete: The item(s) consist of objects that cannot be split up (boat, book, etc. ) 3. Mixed: The item(s) are both continuous and discrete copyright 2005 Dr. Annette M. Burden 3

Continuous Methods - Overview 1. Divider - Chooser: 2 player game. One player cuts, other chooses. 2. Lone Divider: 3 player game. One player cuts, two players choose. 3. Lone Chooser 3 player game. Two players cut, one player chooses. 4. Last Diminisher: More than 3 players copyright 2005 Dr. Annette M. Burden 4

Basic Concept Chocolate Strawberry 400 200 copyright 2005 Jerry buys a chocolate-strawberry cake for $20. Jerry values chocolate 4 times as much as he values strawberry. 1. What is the value of the strawberry ½ of the cake? a) 4 x + x = $20 or 5 x = 20 or x = $4 2. What is the value of the chocolate ½ of the cake? a) 4($4) = $16 3. A piece of the cake is cut as shown at left. What is the value of the piece to Jerry? 4. A piece of the cake is cut as shown at left. What is the value of the piece to Jerry? a) ($16)(40/180) + ($4)(20/180) = $4. 00 Dr. Annette M. Burden 5

Basic Concept Whole Cake s 1 s 2 s 3 Andy $12. 00 $3. 00 $5. 00 $4. 00 Paul $15. 00 $4. 50 $6. 50 Cheryl $13. 50 $4. 50 Which of the three slices are fair shares to: • Andy: $12/3 players = $4 so any piece over $4 or s 2, s 3 • Paul: $15/3 players = $5 so any piece over $5 or s 3 • Cheryl: $13. 50/3 players = $4. 50 so any piece over $4. 50 or s 1, s 2, s 3 copyright 2005 Dr. Annette M. Burden 6

Divider – Chooser Method i. Player A divides cake into 2 parts in any way he or she desires. ii. Player B chooses the piece he or she wants. iii. Envy-free scheme. copyright 2005 Dr. Annette M. Burden 7

Lone-Divider Procedure: 3 players i. By random draw, one of the 3 players is designated to be the divider, D. The other 2 players will be choosers, C 1 and C 2 D divides the cake into 3 pieces s 1, s 2, s 3 as equal as possible. C 1 declares which of the 3 pieces are a fair share to him. Independently, C 2 does the same. These are the choosers’ bids. How the pieces are divided: ii. iv. i. ii. Case I: if c 1 and c 2 like different pieces then D gets the piece neither of the choosers want Case II: if c 1 and c 2 both like the same piece and both disapprove of the same piece, then D gets the piece that the choosers both disapprove of. The remaining pieces are put together and the divide and choose method is used to determine who gets what. copyright 2005 Dr. Annette M. Burden 8

Lone-Divider Procedure: 3 players copyright 2005 Dr. Annette M. Burden 9

Steinhaus Lone-Divider Procedure: 3 players s 1 s 2 s 3 D 33 1/3

Lone Chooser Procedure 3 players i. Players A and B divide the cake using the Divide and Choose method ii. Player A then subdivides her share into thirds while player B subdivides his share into thirds. iii. Player C then selects a 1/3 rd share from player A and a 1/3 rd share from player B. iv. Players A & B keep their remaining shares. copyright 2005 Dr. Annette M. Burden 11

Lone Chooser copyright 2005 Dr. Annette M. Burden 12

Last Diminisher (4 player example) • A cuts ¼ of cake and hands it to B • If B feels piece > ¼, B trims piece placing trimmings with remainder of cake and passes cut piece to C. If B feels piece is < to ¼, then B passes piece to C without trimming it. • With the piece given to him by B, C does same procedure as B, passing the trimmed or untrimmed piece onto D. • D does same as other players, but D is the last player, so if D trims the piece, D keeps it and exits the game. Otherwise, the piece goes back to the last player who trimmed it or to A if no one trimmed it and that player exits the game. • Process starts over by cutting another piece of approximately 1/3 of the original from the remaining cake. • When down to 2 players, use divide and choose scheme. copyright 2005 Dr. Annette M. Burden 13

Last Diminisher • Ann – cuts ¼ of cake • Bob- trims the piece

Last Diminisher • Ann – cuts ¼ of cake • Carl - pass •

Last Diminsher • Randomly select a divider between Carl and Deb. • Use divider-chooser

Discrete Methods - Overview 1. Method of sealed bids: Used primarily to divide up an inheritance 2. Method of Markers: Used primarily to divide up many items that are similar in value copyright 2005 Dr. Annette M. Burden 17

Method of Sealed Bids 1. Each player independently assigns a value all assets to be divided. 2. Award items to the highest bidders. 3. Compute each person’s total by adding each person’s bids of the items. 4. Compute each person’s fair share by dividing his/her total by the total number of bidders. copyright 2005 Dr. Annette M. Burden 18

Method of Sealed Bids 5. Subtotal for each bidder = Item awarded – (player’s value of item awarded – fair share) 6. Surplus = fair share – sum of each player’s value of item awarded 7. Extra = surplus divided by total number of bidders. 8. Final Division for each bidder = Item awarded – (player’s value of item awarded – fair share) + extra copyright 2005 Dr. Annette M. Burden 19

Method of Sealed Bids Object James Art Martha Cleo House $80. 000 $75, 000 $90, 000 $60, 000 Car $10, 000 $12, 000 $13, 000 $15, 000 Totals $90, 000 $87, 000 $103, 000 $75, 000 Fair Share $22, 500 $21, 750 $25, 750 $18, 750 $22, 500 $21, 750 House – (90, 000 - Car –($15, 000 - 25, 750) 18, 750) (Totals/4) Subtotal Surplus in estate: $64, 250 - $3, 750 - $22, 500 - $21, 750 = $16, 250 Extra awarded to each: $16, 250/4 = $4, 062 Totals $22, 500 $21, 750 House - $64, 250 Car + $3, 750 surplus/4 $4, 062. 50 Final Division $26, 565. 50 $25, 812. 50 House - $60, 187. 50 Car -$7, 812. 50 copyright 2005 Dr. Annette M. Burden 20

Method of Markers 1. The items are laid out in a row with no particular ordering of the items in mind. 2. (Bidding) Each player independently divides the row into N fair shares by placing N-1 markers between the items. 3. (Allocations) Scan the array from left to right until the first 1 st marker of any player is located. That player is allocated the items up to his/her 1 st marker and the player exits. His/her remaining markers are removed. copyright 2005 Dr. Annette M. Burden 21

Method of Markers 4. Continue the Allocation procedure scanning from left to right until the first 2 nd marker of any player is located. That player is allocated the items from his/her 1 st marker to his/her 2 nd marker. His/her remaining markers are removed and that player exits. Continue in this manner until all players have been allocated a fair portion of the items. 5. (Leftovers) The leftover items can be divided among the players via a lottery procedure. copyright 2005 Dr. Annette M. Burden 22

Method of Markers A 3 A 2 A 1 C 1 D 1 B 1 C 2 B 2 D 2 B 3 D 3 C 3 4 players so there should be 3 divisions markers per player Black arrows: player A. Red arrows: player B. Blue arrows: player C. Green arrows: Player D copyright 2005 Dr. Annette M. Burden 23

Method of Markers A 3 A 2 A 1 C 1 D 1 B 1 C 2 B 2 D 2 B 3 D 3 C 3 Player A (Black) is the first marker encountered, so player A gets the Grouping taking him to his 1 st marker. Player A exits the game and The remainder of the black markers are removed. copyright 2005 Dr. Annette M. Burden 24

Method of Markers C 1 D 1 B 1 C 2 B 2 D 2 B 3 D 3 C 3 Player C (Blue) is the first 2 nd marker encountered, so player C gets the items between the 1 st blue and 2 nd blue markers. Player C exits the Game and the remainder of the blue markers are removed. copyright 2005 Dr. Annette M. Burden 25

Method of Markers D 1 B 2 D 2 B 3 D 3 Player B (Red) is the first 3 rd marker encountered, so player B gets the items between the 2 nd red and 3 rd red markers. Player B exits the Game and the remainder of the red markers are removed. copyright 2005 Dr. Annette M. Burden 26

Method of Markers D 1 D 2 D 3 Player D (Green) gets the last group of items from the green 3 rd marker To the end of the row. The remaining 2 items are divided evenly Among the 4 players. copyright 2005 Dr. Annette M. Burden 27