On the fair division of a heterogeneous commodity

Abstract

Consider a heterogeneous but divisible commodity, bundles of which are represented by the (measurable) subsets of the good. One such commodity might be land. The mathematics literature has considered agents with utilities that are nonatomic measures over the commodity (and hence are additive). The existence of ‘α-fair’ allocations, in which each agent receives a utility proportional to his utility of the endowment of the entire economy, was demonstrated there. Here we extend these existence results to α-fair efficient allocations, envy-free allocations, envy-free efficient allocations, group envy-free and nicely shaped allocations of these types. We examine utilities that are not additive and relate the mathematics literature to the economics literature. We find sufficient conditions for the existence of egalitarian-equivalent efficient allocations. Finally, we consider the problem of allocating a time interval (uses of a facility). Existence of an envy-free allocation had been demonstrated in earlier literature. We show that any envy-free allocation is efficient as well as group envy-free. We extend this last result to a more general setting.