Rational benevolence in small committees
Abstract
We consider a pie-splitting game involving three committee members. In response to
the large literature on sequential procedures in this type of game, we propose an
institution that is inspired by auction theory. The (sealed) bids of the players are
proposals for a distribution of the pie and are given simultaneously. If any of the bids
is preferred to all others in a pairwise comparison (i.e. a Condorcet winner exists) then
this proposal is implemented. If such a bid does not exist then an equal split of the pie
is assumed. An equilibrium of this game is for each player to suggest that one of the
opponents should receive the lion’s share of the pie, even though each player cares
only about his own share. We call this phenomenon “rational benevolence”.
Although the end that is desired by the players is purely egoistic, the means of
achieving it may be perceived as benevolent. Several applications of the game are
suggested.
Publisher
Universitetet i TromsøUniversity of Tromsø
Series
Working paper series in economics and management, 2006, nr 10Metadata
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