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Fair Division 95
There are two broad classifications of fair division methods: those that apply to
continuously divisible items, and those that apply to discretely divisible items.
Continuously divisible items are things that can be divided into pieces of any size, like
dividing a candy bar into two pieces or drawing borders to split a piece of land into smaller
plots. Discretely divisible items are when you are dividing several items that cannot be
broken apart easily, such as assets in a divorce (house, car, furniture, etc).
Divider-Chooser
The first method we will look at is a method for continuously divisible items. This method
will be familiar to many parents - it is the “You cut, I choose” method. In this method, one
party is designated the divider and the other the chooser, perhaps with a coin toss. The
method works as follows:
Divider-Chooser Method
1. The divider cuts the item into two pieces that are, in his eyes, equal in value.
2. The chooser selects either of the two pieces
3. The divider receives the remaining piece
Notice that the divider-chooser method is specific to a two-party division. Examine why this
method guarantees a fair division: since the divider doesn’t know which piece he will
receive, the rational action for him to take would be to divide the whole into two pieces he
values equally. There is no incentive for the divider to attempt to “cheat” since he doesn’t
know which piece he will receive. Since the chooser can pick either piece, she is guaranteed
that one of them is worth at least 50% of the whole in her eyes. The chooser is guaranteed a
piece she values as at least 50%, and the divider is guaranteed a piece he values at 50%.
Example 3
Two retirees, Fred and Martha, buy a vacation beach house in Florida together, with the
agreement that they will split the year into two parts.
Fred is chosen to be the divider, and splits the year into two pieces: November – February
and March – October. Even though the first piece is 4 months and the second is 8 months,
Fred places equal value on both pieces since he really likes to be in Florida during the winter.
Martha gets to pick whichever piece she values more. Suppose she values all months
equally. In this case, she would choose the March – October time, resulting in a piece that
she values as 8/12 = 66.7% of the whole. Fred is left with the November – February slot
which he values as 50% of the whole.
Of course, in this example, Fred and Martha probably could have discussed their preferences
and reached a mutually agreeable decision. The divider-chooser method is more necessary in
cases where the parties are suspicious of each other’s motives, or are unable to communicate
effectively, such as two countries drawing a border, or two children splitting a candy bar.