Equitable Section 1 fair division : Question 1 A A fair-division procedure is said to be equitable if each player believes he or she received the

same fractional part of the total volume. Envy-Free A fair-division procedure is said to be envy-free if each player has a strategy that can guarantee him or her a share of whatever is being divided that is, in the eyes of that player, at least as large (or at least as desirable) as that received by any other player, no matter what the other players do. Pareto-Optimal A fair-division procedure is said to be Pareto-optimal if it produces an allocation of the property such that no other allocation achieved by any means whatsoever can make any one player better off without making some other player worse off . QUESTION 1 B Sandra Summer home Retirement account Kenny Home investments Other = 50

= 65

Sandra is the initial winner Point ratio 15/10 =1.5 50/40 =1.25 Therefore the shared item will be the retirement account . 65- 50x = 50 + 40x 15 = 90x X = 15/90 X = 1/6 So Kenny will get 1/6 of the retirement account Sandra gets: summer home and 5/6 of retirement account Kenny gets: home, investments, other and 1/6 of retirement account .

Question 2 Method of sealed bids

The Method of Sealed Bids

1. Bidding. Each player determines how much each item is worth, then submits bids
on each item.No player gets to see the other players' bids until all bids are submitted. 2. Allocation. Each item is allocated to the bidder who valued it most highly. 3. First Settlement. Each player then either pays or receives money to make sure he/she has a fair share. 4. Division of Surplus. There is usually money left over,which can be divided equally among the players.
Lady agnes Painting House Cat Total Fair share Item value Settlement $0 $54,000 $0 $54,000 $235,000 $85,000 $235,000 -$150,000 Lord charles * * * $25,000 $75,000 $25,000 $50,000 Lady breadtress

Summary Lady agnes receives $54,000 from the estate. Lady braidtress receives the cat and $50,000. Lady Charles receives the painting , the house but has to pay the estate $150,000. Division of surplus The estate has $46,000 remaining Therefore 46,000 3= $15,333.00 Lady agnes Final settlement $69,333 Lord charles -$134,606 Lady breadtress $65,333

Final; summary Lady agnes receives $69,333 from the estate. Lady braidtress receives the cat and $65,333. Lord Charles receives the painting and the house but has to pay the estate $134,606.