Monotonicity and Competitive Equilibrium in Cake-cutting

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 examine 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.Comment: Revised versio

Universal characterization sets for the nucleolus in balanced games

We provide a new mo dus op erandi for the computation of the nucleolus in co op- erative games with transferable utility. Using the concept of dual game we extend the theory of characterization sets. Dually essential and dually saturated coalitions determine b oth the core and the nucleolus in monotonic games whenever the core is non-empty. We show how these two sets are related with the existing charac- terization sets. In particular we prove that if the grand coalition is vital then the intersection of essential and dually essential coalitions forms a characterization set itself. We conclude with a sample computation of the nucleolus of bankruptcy games - the shortest of its kind