Monotonicity and Competitive Equilibrium in Cake-cutting Erel Segal-Halevia, Balázs Sziklaib,c aBar-Ilan University, ramat-gan 5290002, Israel.
[email protected] bGame Theory Research Group, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Email:
[email protected] cCorvinus University of Budapest, Department of Operations Research and Actuarial Sciences. Abstract We study the monotonicity properties of solutions in the classic problem of fair cake-cutting — dividing a heterogeneous resource among agents with different preferences. Resource- and population-monotonicity relate to scenarios where the cake, or the number of participants who divide the cake, changes. It is required that the utility of all participants change in the same direction: either all of them are better-off (if there is more to share or fewer to share among) or all are worse-off (if there is less to share or more to share among). We formally introduce these concepts to the cake-cutting problem and ex- amine whether they are satisfied by various common division rules. We prove that the Nash-optimal rule, which maximizes the product of utilities, is resource- monotonic and population-monotonic, in addition to being Pareto-optimal, envy- free and satisfying a strong competitive-equilibrium condition. Moreover, we prove that it is the only rule among a natural family of welfare-maximizing rules that is both proportional and resource-monotonic. Keywords: game theory, cake-cutting, resource-monotonicity, population-monotonicity, additive utilities 1. Introduction arXiv:1510.05229v7 [cs.GT] 10 Feb 2018 The interest in monotonicity axioms was motivated by paradoxes such as the throw-away paradox (Aumann and Peleg, 1974): in some cases an agent can improve his final utility by discarding some goods from the initial endowment.