An Equilibrium Analysis of Knaster’s Fair Division Procedure

An Equilibrium Analysis of Knaster’s Fair Division Procedure

Blog Article

In an incomplete information setting, we analyze the sealed bid auction proposed by Knaster (cf.Steinhaus (1948)).This procedure was designed to efficiently and fairly allocate multiple indivisible items when participants report their valuations truthfully.In equilibrium, players do not activecare spitfire follow truthful bidding strategies.We find that, ex-post, the equilibrium allocation 12n/1200 wella is still efficient but may not be fair.

However, on average, participants receive the same outcome they would have received if everyone had reported truthfully—i.e., the mechanism is ex-ante fair.