Indexed on: 08 Aug '07Published on: 08 Aug '07Published in: Public choice
We consider a game in which three committee members must divide up a benefit among themselves. 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 benefit 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 benefit 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 benefit, 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.