Fair Division: Method of Sealed Bids

The method of sealed bids applies in the situation when a number of distinct items is to be shared by a comparable number of players. The method will only work provided participants are able and willing to trade the goods for cash.

Each player assigns a (subjective) value to each of the items at hand and submits the bids in a sealed envelope. (The average of the bids by a single player provides that player's estimate for the fair share of the goods.) Players are not aware about each other's estimates. Envelopes are open simultaneously, and items are assigned to the highest bidder. The goods received by a player may exceed or not add up to that player's subjective value of the fair share. Depending on the circumstances the player than agrees to pay the excess over or receive a cash payment to make up to the fair share.

The total of the payments and the receipts is never negative. If it's positive, it may be evenly divided between the participants.

(Bold numbers could be clicked upon. To increase the number, click to the right of its vertical center line. To decrease it click to the left of the line. Dragging the mouse near the center line will accomplish the same task, but faster.)

This applet requires Sun's Java VM 2 which your browser may perceive as a popup. Which it is not. If you want to see the applet work, visit Sun's website at http://www.java.com/en/download/index.jsp, download and install Java VM and enjoy the applet.

What if applet does not run?

(A newer version of the applet is available at https://www.cut-the-knot.org/Curriculum/SocialScience/SealedBids2009.shtml)

Related material

  • The Constitution and Paradoxes
  • Student's Social Choice
  • Adams' Apportionment Method
  • Banzhaf Power Index Calculator
  • Fair Division: Method of Lone Divider
  • Fair Division: Method of Markers
  • Fair Division: Method of Sealed Bids II
  • Fast Power Indices
  • Five Methods of Apportionment
  • Four Voting Methods
  • Hamilton's Apportionment Method
  • Huntington-Hill Apportionment Method
  • Jefferson's Apportionment Method
  • Method of Markers II
  • Shapley-Shubik Power Index Calculator
  • Voting Methods and Social Choice
  • Webster's Apportionment Method
  • Weighted Voting and Power Indices
  • |Contact| |Front page| |Contents| |Up| |Store|

    Copyright © 1996-2017 Alexander Bogomolny


    Search by google: