Cake Division by Majority Decision

62 Pages Posted: 12 Jan 2007

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Reseaarch; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Bernhard Pachl

affiliation not provided to SSRN

Date Written: December 2006

Abstract

We consider a collective choice process where three players make proposals sequentially on how to divide a given quantity of resources. Afterwards, one of the proposals is chosen by majority decision. If no proposal obtains a majority, a proposal is drawn by lot. We establish the existence of the set of subgame perfect equilibria, using a suitable refinement concept. In any equilibrium, the first agent offers the whole cake to the second proposal-maker, who in turn offers the whole cake back to the first agent. The third agent is then indifferent about dividing the cake between himself and the first or the second agent.

Keywords: division of a cake, majority decisions, tie-breaking rules

JEL Classification: C72, D30, D39, D72

Suggested Citation

Gersbach, Hans and Pachl, Bernhard, Cake Division by Majority Decision (December 2006). CESifo Working Paper Series No. 1872. Available at SSRN: https://ssrn.com/abstract=956262

Hans Gersbach (Contact Author)

ETH Zurich - CER-ETH -Center of Economic Reseaarch ( email )

Zürichbergstrasse 18
Zurich, 8092
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+41 44 632 82 80 (Phone)
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IZA Institute of Labor Economics

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CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Bernhard Pachl

affiliation not provided to SSRN

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