Allocating Indivisible Goods

The problem of allocating divisible goods has enjoyed a lot of attention in both mathematics (e.g. the cake-cutting problem) and economics (e.g. market equilibria). On the other hand, the natural requirement of indivisible goods has been somewhat neglected, perhaps because of its more complicated nature. In this work we study a fairness criterion, called the Max-Min Fairness problem, for k players who want to allocate among themselves m indivisible goods. Each player has a specified valuation function on the subsets of the goods and the goal is to split the goods between the players so as to maximize the minimum valuation. Viewing the problem from a game theoretic perspective, we show that for two players and additive valuations the expected minimum of the (randomized) cut-and-choose mechanism is a 1/2-approximation of the optimum. To complement this result we show that no truthful mechanism can compute the exact optimum. We also consider the algorithmic perspective when the (true) additive valuation functions are part of the input. We present a simple 1/(m - k + 1) approximation algorithm which allocates to every player at least 1/k fraction of the value of all but the k - 1 heaviest items. We also give an algorithm with additive error against the fractional optimum bounded by the value of the largest item. The two approximation algorithms are incomparable in the sense that there exist instances when one outperforms the other.