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FAIR SHARES 1

Assignment 2: Fair Shares

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FAIR SHARES 2

Assignment 2: Fair Shares

There are three people; Abraham, Bobby, and Charlene. There exists an honest

assessment of the value of the dollar since all the players submit sealed bid simultaneously.

Dividing the bid of each player by the number of players gives the fair share.

Abraham’s bid= $12,000

Fare share= $12,000/3 = $4,000

Bobby’s bid=$6,000

Fare share= $6000/3 = $ 2,000

Charlene’s bid=$9,000

Fare share= $ 9,000/3 = $3,000

 The collection goes to Abraham at $ 12,000. The remaining amount goes into the kitty

since $ 12,000 is greater than the fair share of $4,000.

 The kitty amount is $ 12,000 - $ 4,000= $ 8,000

 From the kitty’s $ 8,000, Charlene gets her fair share amounting to $ 3,000, and

Bobby gets his fair share amounting to $ 2,000.

 Kitty remain with: $ 8,000 - $ 3,000 - $ 2,000= $ 3,000

 Again the $ 3,000 is divided among the three players meaning that; Abraham paid $

12,000, he got a fair share of $4,000, $ 8,000 went into the kitty, and he remained

with $ 1000 after the other received their fair shares.

 Charlene won nothing since her bid was low, had a fair share of $ 3000 and a surplus

of $ 1,000.

 Bobby also won nothing because his fair share was received from the surplus left in

the kitty by Abraham; $ 8,000 and a left-over of $ 1,000.

FAIR SHARES 3

Summary of the sealed bids

 Since Abraham paid $ 12,000, he won the bid and got a fair share of $ 4000. A

surplus of $ 8000 remained.

 Bobby received his fair share of $ 2000 out of the surplus.

 Charlene received her fair share of $ 3000 out of the surplus leaving another surplus

of $ 3000 to be shared again among the three.

Answers to the questions

1. Who received the collection of frogs?

Abraham, since he submitted the highest bid.

2. What is each person’s fair share of the monetary value of the collection?

From the calculations above, the fair shares received are;

Abraham- $ 4,000

Bobby- $ 2,000

Charlene- $ 3,000

3. Why is the monetary amount of each fair share different?

The monetary of the fair share depends on the bid submitted by each of the members.

They offered different bid amounts hence a different fair share.

4. How much money is owed to each of the two people who did not win?

Bobby- fair share of $ 3,000 + $1,000 from the surplus= $ 4,000

Charlene- fair share of $ 2,000 + $ 1,000 from the surplus= $ 3,000

FAIR SHARES 4

5. In your opinion how fair is the process?

In this case, the process is not fair because the scenario shows that Abraham started

by unsealing his estimate. The method of unsealed bid remains open and fair in a competition

when there is no opportunity to influence the process by sharing the bid information during

the process of evaluation. Also, the item is given to the bidder that valued it the highest.

Giving a value to an item and bidding depends on the amount of money the bidders have.

Those that don’t afford much cash will value the item at a low price and bid; meaning that

they are not going to win the bid.

In this case, the value of the item is just the same since there is only one type (frogs).

A fair method is to use the Divider Chooser method that guarantees a fair division among the

members regardless of how they value the items. It is possible to allocate the members a fair

share because they bid by declaring the shares the see to be fair.

6. Given that you cannot afford to “win” the process, describe how you will go

about deciding what to put down for your own estimate of the value of the

collection

I would have made a bid of $ 10,000. Make that bid would mean that Abraham will

have to make a higher bid than that bid to win the bid to keep me from winning the bid and

the end getting more profit.

FAIR SHARES 5

References

Fair Division Problems and Fair Division Schemes. (2017). Colorado.edu. Retrieved 12

April 2018, from https://www.colorado.edu/education/DMP/fair_division.html

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