1 Allocation of an Infinitely Divisible Good

when Preferences are Single Peaked

1.1 Introduction
Assume that you are at a picnic with a group of friends. Naturally you have
brought some meat and plan the start a barbecue. Of course somebody has
to watch the barbecue. Given that there are other fun stuff to do during the
picnic, it is not fair to leave the job of taking care of the barbecue to a single
individual. Moreover there are people who enjoy taking care of the barbecue
for a limited time. Hence you and your friends have to decide on who should
take care of the barbecue and for how long. Being an economist, your friends
ask you to allocate the job among them (is this a problem of economics!).
As an economist you know that you can solve the problem easier if you can
model the problem (of allocating the time required to watch the barbecue).
To model you have to decide what is essential in the problem. The following
can be thought as the essential elements of the problem your face:

1. There is a group of agents (friends) who must share the job of watching
the barbecue. We will denote this set (group) of agents with N =
{1, 2, . . . , n}.

2. There is a fixed length of time T that the agents must take care of the
barbecue. This time interval is infinitely divisible.

3. At any time there will be exactly one agent taking care of the barbecue
(you need at least one person, and too many cooks will spoil the food).

4. Each agent only cares about how long they have to take care of the
barbecue, i.e., they do not care if they have to take care of the barbecue
from 11:00 to 12:00 or from 12:30 to 13:30, all that matters is the length
of the interval. Moreover for each agent there is an ideal duration and
given two two durations which are both less than or both greater than
this duration the one which is closer to the ideal duration is prefered
to the other. That is, each agent i has a preference relation Ri over the
interval [0, T ] such that: there is an ideal duration p(Ri ) (depending
on the preference relation of agent i) such that for any durations t, t′ ∈
[0, T ] if both t and t′ are less or if both are more than the ideal duration
p(Ri ), then agent i prefers the one which is closer to the ideal duration,
i.e., if t < t′ < p(Ri ) or p(Ri ) > t′ > t, then p(Ri ) Pi t′ and t′ Pi t.
We will call such preference relations single peaked (over the interval
[0, T ]).

1
 In summary, the situation you are faced with can be modeled by a list
(N ; T ; (Ri )i∈N ), where N is the set of agents, T is a fixed time length that
must be shared between the agents, and for each i ∈ N , Ri is a single-peaked
preference relation of agent i over the set of possible durations that he can
be assigned, i.e., over [0, T ].
Given that you have modeled the situation, what you have to do next is
to solve the problem. What we mean by a solution in this case is to find a
list (t1 , t2 , . . . , tn ), where ti ∈ [0, T ] is the duration that agent i must take
care of the barbecue, such that t1 + t2 + · · · + tn = T .
Before we solve the barbecue problem lets look into a different problem.
Assume that, after the earthquake in the Marmara region, you are assigned
to the task of distributing the supplies that are sent to the region. You have
just received M tons of rice to be delivered to the region. What you have
to decide is how much to give each local station, which stores the supplies
in order to distribute to the local people. Assume that there are n local
stations. Each local station would like to receive a certain amount of rice,
lets call this their ideal amount. If they receive less than this there will be a
shortage of rice. If they receive more than this they will have some amount
of rice that they do not need. This will occupy valuable storage room that
could be used for other supplies. Also, the extra amount could have been
useful for other stations. Hence the local stations becomes worse off if you
give them more or less than their ideal amounts. Hence your problem is to
decide how to allocate a give amount M of rice to n local stations where
each possibly have different ideal amounts. Again you decide to model this
situation in order to solve your allocation problem. The following are the
essential ingredients of the problem:

1. There is a group of agents (local stations) who are expecting shares

of a certain good (rice). We will denote this set of agents with N =
{1, 2, . . . , n}.

2. There is a fixed amount M of the good and the good is infinitely divis-
ible.

3. For each agent there is an ideal amount and the closer the amount of
rice that they are given to this ideal amount, the better off the agent
is. That is, each agent i has a single-peaked preference relation over
the interval [0, M ].

In summary, the situation you are faced with can be modeled by a list
(N ; M ; (Ri )i∈N ), where N is the set of agents (local stations), M is a fixed
amount of rice that must be distributed between the agents, and for each

2
i ∈ N , Ri is a preference relation of agent i over the set of amounts of rice
that they can receive, i.e., over [0, M ]. We assume that each Ri , i ∈ N ,
is such that there is a p(Ri ) ∈ [0, M ], such that for any m, m′ ∈ [0, M ] if
m < m′ < p(Ri ) or p(Ri ) > m′ > m, then p(Ri ) Ri m′ and m′ Ri m.
But this is essentially the same problem that we were faced in our picnic
problem. Problems of this type will be called problems of allocating an
infinitely divisible good (time, rice, money, etc.) to a set of agents with
single-peaked preferences.
Some other similar situations are:

ˆ A team of workers have been assigned a task that requires T hours of

work, but only one worker can work at a given time. The workers are
paid a fixed hourly wage. The workers would also like to have some
time for leisure. Under suitable assumptions we can assume that there
is a time ti , for each worker i, which is an ideal amount of work for
that worker.

ˆ A group of partially altruistic agents have to divide some amount of an

infinitely divisible good. If an agent consumes little, he cares mainly
of himself; then an increase in his consumption makes him better off in
spite of the negative impact this has on the consumption of the others.
As his consumption increases he gives less and less priority to himself.
At some point, his concern for others may dominate, and increasing his
consumption further may actually make him worse off.

ˆ A state enterprise is being privatized by offering stocks to the public at

a fixed price per share. There is a set of agents who would like to buy
shares of this firm. Each agent has a preference relation over the set
of possible shares he can buy (which is from buying nothing to buying
all the shares). Each agent might have some unexpected costs in the
future. This with the fact that the price of the stock might fall in the
future buying “too much” of the stock risky. Hence the agent prefers
buying less to buying more after a certain level (which is determined
by his income, savings, future plans etc.). But there is a good chance
that the value of the shares will increase. So he prefers buying more to
buying less until a certain level.

Note that in each of the situations given above, there is a set of agents,
N , and an amount, E, of some infinitely divisible good. This amount E is to
be divided among the agent in N . Hence each agent can receive an amount
between 0 and E. The agents has preference relations over the amount they
can receive, i.e., over the [0, E]. Each agent’s preference relation is such

3
that up to a certain point (which can be different for each agent) the agent
prefers receiving more to receiving less. After this point the agent prefers
receiving less to more. We will call such preference “single-peaked” preference
relations.

Definition 1 (Single-peaked preference relation) A preference rela-

tion Ri over an interval [0, E] is single-peaked if there exists a number
p(Ri ) ∈ [0, E] such that
∀xi , x′i ∈ [0, E] [xi < x′i < p(Ri ) or p(Ri ) > x′i > xi ] ⇒ p(Ri ) Pi x′i Pi xi .
The value p(Ri ) is called the peak (ideal point) of the preference relation Ri .
Note that if a preference relation Ri is single-peaked over an interval
[0, E], then it has an unique peak. The peak is the most preferred point in
[0, E].
Figure 1 show the graph of a numerical representation, denoted with ui ,
of a single peaked preference relation Ri . From this graph we see that p(Ri )
is the most preferred amount for agent i. The agent prefers the amount a to
b, is indifferent between b and c, and prefers c to d.
Graphs of numerical representations of several preference relations which
are single-peaked are given in Figure 2.
Graphs of numerical representations of several preference relations which
are not single-peaked are given in Figure 3.
Two different numerical representations of a single-peaked preference re-
lation is shown in Figure 4
A single-peaked preference relation Ri over [0, E] can also be described
with a function ri : [0, E] → [0, E] ∪ {−∞, ∞} (see Figure 5) defined by: for
any xi ∈ [0, E]
xi ≤ p(Ri ) ⇒ ri (xi ) = inf{x′i ∈ [p(Ri ), E] : xi Ri x′i }
xi ≥ p(Ri ) ⇒ ri (xi ) = sup{x′i ∈ [0, p(Ri )] : xi Ri x′i }
Note that inf ∅ = ∞ and sup ∅ = −∞. Also, if Ri is continuous and ri (xi ) ∈
[0, E], then xi Ii ri (xi ).
Given a preference relation Ri over [0, E] and a point xi ∈ [0, E], we
define the lower contour set of Ri at xi , denoted LC(Ri , xi ), as the set of
elements in [0, E] which xi is at least as good as, i.e.,
LC(Ri , xi ) = {x′i ∈ [0, E] : xi Ri x′i } .
similarly we define the upper contour set of Ri at xi , denoted U C(Ri , xi ), as
the set of elements in [0, E] which are at least as good as xi , i.e.,
U C(Ri , xi ) = {x′i ∈ [0, E] : x′i Ri xi } .

4
 ui

xi
a c p(Ri ) d b e E

Figure 1: The graph of a numerical representation of a single peaked pref-

erence relation Ri . From the graph we conclude that an agent with the
corresponding preference relations: (i) prefers p(Ri ) to anything else, (ii) is
indifferent between a and b, (iii) indifferent between c, and d, (iv) any quan-
tity in the interval (c, d) is preferred to any quantity that is less than c or
greater than d, (v) there is not alternative that the agent is indifferent to e,
(vi) any quantity less than or equal to e is preferred to any quantity grater
than e.

5
ui ui

xi xi
E E
ui

xi
E

Figure 2: Graphs of numerical representations of several preference relations

which are single-peaked.

6
 ui

xi
E
ui

xi
E
ui

xi
E
ui

xi
E

Figure 3: Graphs of numerical representations of several preference relations

which are not single-peaked.

7
 ui

vi

ui

xi
a c p(Ri ) d b

Figure 4: Numerical representation of a single-peaked preference relation.

Here ui and vi represent the same single-peaked preference relation.

ui

xi
xi x′i p(Ri ) x′′i E

Figure 5: The description of the preference of agent i in terms of ri . Here

ri (xi ) = ∞, ri (x′i ) = x′′i , ri (x′′i ) = x′i and p(Ri ) is the unique point such that
ri (p(Ri )) = p(Ri ).

8
If Ri is continuous, then U C(Ri , xi ) = [xi , ri (xi )] ∩ [0, E] if xi ≤ p(Ri ) and
U C(Ri , xi ) = [ri (xi ), xi ] ∩ [0, E] if xi ≥ p(Ri ).
The class of reflexive, complete, transitive, continuous, and single-peaked
preference relations will be denoted with Rsp .

Definition 2 A triple (N ; E; (Ri )i∈N ) is a problem of allocating an infinitely

divisible good to a set of agents with single peaked preferences if

1. N = {1, 2, . . . , n} is a finite and nonempty set of agents.

2. E ∈ R+ is a fixed amount of an infinitely divisible good that must be

allocated among the agents in N .

3. For each i ∈ N , Ri is a single-peaked preference relation over [0, E]

Definition 3 (Allocation) P A allocation (solution) for a problem (N ; E; R)

N
is a vector x ∈ R+ such that i∈N xi = E.

Definition 4 (Pareto efficient) For a problem (N ; E; R), an allocation x

is Pareto efficient for (N ; E; R) if there is no allocation y which every agent
weakly prefers and at least one agent strictly prefers to x, i.e., of there is no
allocation y such that

∀i ∈ N yi Ri xi and ∃i ∈ N yi Pi xi .

If there exists such an y we will say that the allocation y Pareto dominates
the allocation x.

Proposition 1 For any allocation problem (N ; E; R) an allocation x is

Pareto efficient if and only if
P
1. for any i ∈ N , xi ≤ p(Ri ) whenever p(Ri ) ≤ E, and
P
2. for any i ∈ N , xi ≥ p(Ri ) whenever p(Ri ) ≥ E.

Proposition 2 For any allocation problem (N ; E; R) the set of Pareto effi-

cient allocations is non-empty and convex.

1.2 Allocation Rules

An allocation rule is a systematic way of associating an allocation with each
allocation problem.

9
Definition 5 (Equal division rule) The equal division allocation for an
problem (N ; E; R) is the allocation in which each agent receives the same
amount, i.e., E/n. The rule which associates with each problem its equal
division allocation will be called the equal division rule, and will be denoted
with EA.

Definition 6 (Proportional Rule) Given a problem (N ; E; R) the alloca-

tion x defined by
p(Ri )

P


P E if p(Rj ) ̸= 0 ,
j∈N p(Rj )
∀i ∈ N xi =
E

 P
if j∈N p(Rj ) = 0 .
n
will be called the proportional allocation for (N ; E; R). The allocation rule
which associates with each problem its proportional allocation will be called
proportional rule and denoted with P r.

Definition 7 (Equal Distance Rule) Given a problem (N ; E; R) the al-

location x defined by

∀i ∈ N xi = max{0, p(Ri ) − λ}
P P
where λ ∈ R is such that xi = E (note that if p(Ri ) ≤ E, then λ ≤ 0)
will be called the equal distance allocation for (N ; E; R). The rule which
associates with each problem its equal distance allocation will be called equal
distance rule and denoted with ED.

Definition 8 (Uniform Rule) Given a problem (N ; E; R) the allocation

x defined by
( P
max{p(Ri ), λ} if p(Rj ) ≤ E ,
xi = Pj∈N
min{p(Ri ), λ} if j∈N p(Rj ) ≥ E .
P
where λ is such that xi = E, will be called the uniform allocation for
(N ; E; R). The allocation rule which associates with each problem its uniform
allocation will be called uniform rule and denoted with U .
Note that at an allocation selected by the uniform rule there are two
groups of agents: those who receive their ideal amounts and those who receive
the same amount.
An allocation rule is Pareto efficient if associates with each allocation
problem an allocation which is Pareto efficient for that problem.

10
1.3 Envy-free allocations
Definition 9 (Envy-free) Given a problem (N ; E; R), an allocation x is
envy-free if for any pair of agents i, j ∈ N we have xi Ri xj , i.e., if at x no
agent prefers some other agents share to his share. If for some pair i, j ∈ N
we have xj Pi xi , i.e., if agent i prefers agent j’s share to his share, we will
say that agent i envies agent j. An allocation rule is envy-free if it associates
envy-free allocations with each problem.

Proposition 3 The proportional solution concept is Pareto efficient but not

envy-free.

Proof : First we will show that thePproportional rule is Pareto efficient. Let
(N ; E; R) be a given problem. If p(Rj ) = 0 then, for any j ∈ N we have
p(Rj ) = 0 and P r(N ; E; R) = (E/n)j∈N . Thus, for any j ∈ N , p(Ri ) = 0 <
E/n = Fj (N ; E; R). Which, by Proposition 1, implies that F (N ; E; R) is a
Pareto efficient allocation. P P
Now we will
P consider the cases where p(R j ) > 0. If p(Rj ) ≤ E, then
we have E/ p(Rj ) ≥ 1. Therefore, for each i ∈ N ,

p(R )
P i E ≥ p(Ri ) .
p(Rj )
P P
If p(Rj ) ≥ E, then we have E/ p(Rj ) ≤ 1. Therefore, for each i ∈ N ,

p(R )
P i E ≤ p(Ri ) .
p(Rj )

These with Proposition 1 implies the Pareto efficiency of the proportional

rule.
Let N = {1, 2}, E = 10, and R = (R1 , R2 ) be such that p(R1 ) = 6,
p(R2 ) = 8. Then P r1 (N ; E; R) = (6 · 10)/14 and P r2 (N ; E; R) = (8 · 10)/14.
Since 60/14 < 80/14 < 6 agent 1 will envy agent 2. □

Definition 10 (Peak-only) An allocation rule is peak-only if the alloca-

tion it selects for each problem depends only on the peaks of the preference
relations, i.e., a rule F is peak-only if for any pair of problems (N ; E; R),
(N ; E; R′ )
[∀i ∈ N p(Ri ) = p(Ri′ )] ⇒ F (R) = F (R′ ) .

Theorem 1 The uniform rule is the only peak-only allocation rule which is
Pareto efficient and envy-free.

11
Proof : Let F be a Pareto efficient and envy-free rule. Assume that F is not
equal to U . Then there Pexists a problem (N ; E; R)Psuch that F (N ; E; R) ̸=
U (N ; E; R). Assume p(Ri ) ≥ E (the case for ≤ E isP
p(Ri )P similar).
Let F (N ; E; R) = x and U (N ; E; R) = y. Since x ̸= y and xi = yi = E
there must be a pair k, l ∈ N such that xk < yk and xl > yl . We have two
cases to consider: xk < xl and xk ≥ xl
P
If xk < xl : y being Pareto efficient for (N ; E; R) and p(Ri ) ≥ E implies
that yk ≤ p(Rk ). This with xk < yk ≤ p(Rk ) implies that xk < p(Rk ).
If we also have xl < p(Rk ), then agent k would envy agent l. But this
contradicts with x being envy-free. Hence we must have xl > p(Rk ).
Let Rk′ be a single-peaked preference relation such that p(Rk′ ) = p(Rk )
and xl Rk′ xk (one can show that such a preference relations exists).
Consider the preference profile (R1 , . . . , Rk−1 , Rk′ , Rk+1 , . . . , Rn ) =
(Rk′ , R−k ). Note that the peaks of each preference relation in the profile
(Rk′ , R−k ) and the profile R are the same. This with F being peak-only
implies that F (N ; E; (Rk′ , R−k )) = F (N ; E; R) = x. But agent k envies
agent l at the allocation x when he is endowed with the preference Rk′
(note the construction of Rk′ ). This contradicts with F being envy-free.
Hence we can not have xk < xl .

If xk ≥ xl : This time we must have yl < yk . Using similar arguments to

those above (x and y, k and l, and F and U interchanged) will lead to
a contradiction. Hence we can not have xk ≥ xl .

Since the assumption that there exists a problem (N ; E; R) such that

F (N ; E; R) ̸= U (N ; E; R) leads to a contradiction we we must have
F (N ; E; R) = U (N ; E; R) for any (N ; E; R). Hence if F is peak-only, Pareto
efficient, and envy-free, then it must be equal to U , i.e., the uniform rule is
the only rule which is peak-only, Pareto efficient and envy-free. □

1.4 Resource monotonicity

Definition 11 (Resource monotonicity) An allocation rule F is resource
monotonic if for any pair of problems (N ; E; R) and (N ; E ′ ; R) we have

(∀i ∈ N Fi (N ; E; R) Ri Fi (N ; E ′ ; R)) or (∀i ∈ N Fi (N ; E ′ ; R) Ri Fi (N ; E; R))

i.e., F makes assignments in such a way that when the amount to be divided
changes all the agents are effected in the same way: the all become worse off
or they all become better off.

12
 The equal division rule is not resource monotonic. Consider the case
where N = {1, 2}, E = 4, E ′ = 6, and R = (R1 , R2 ) is such that p(R1 ) = 1,
p(R2 ) = 3. Then EA(N ; E; R) = (2, 2) and EA(N ; E ′ ; R) = (3, 3). Note that
agent 1 prefers the allocation EA(N ; E; R) to the allocation EA(N ; E ′ ; R)
but agent 2 prefers the later to the former. Hence EA is not resource mono-
tonic.

Proposition 4 The is no allocation rule which is resource monotonic and

envy free.

Proof : Assume that there exists a resource monotonic and envy free allo-
cation rule F . Let N = {1, 2}. Let R = (R1 , R2 ) be as given in Figure 6.
E = 6 and E ′ = 20. Let x = F (N ; E; R) and x′ = F (N ; E ′ ; R).

E/2 E
3 6 12 14 E′

Figure 6: Preferences used in the proof of the proposition.

Since F is envy free the allocation x must be envy free. But then we
must have x1 ≤ x2 (otherwise agent 2 would envy agent 1 in the problem
(N ; E; R)). This with x1 + x2 = E = 6 implies x1 ≤ 3 and 3 ≤ x2 ≤ 6.
Now consider the allocation x′ which is envy free for the problem
(N ; E ′ ; R). Assume x′1 ≥ x′2 . This inequality with x′1 + x′2 = E ′ = 20
implies x′1 ≥ 20/2 = 10. But if this is the case agent 1 would envy agent 2
in the problem (N ; E ′ ; R), contradicting with the fact that x′ is envy free for
the given problem. Hence we must x′1 ≤ x′2 , which implies x′1 ≤ 10 ≤ x′2 .
If x′2 > 14, then x′1 = 20 − x′2 < 6 and agent 2 will envy agent 1. Thus we
must have x′2 ≤ 14, hence 10 ≤ x′2 ≤ 14 and 6 ≤ x′1 ≤ 10. These imply that
x1 P1 x′1 and x′2 R2 x2 , which contradicts with F being resource monotonic.
Hence we conclude that there is no resource monotonic allocation rule that
selects envy-free allocations for each problem. □

Proposition 5 If a solution concept is one-sided resource monotonic, then

it is continuous in resources.

13
 We will use Rfsp to denote the set of all preference profiles such that, for
each agent i there exists a positive amount xi which agent i is indifferent to
0, i.e., R ∈ Rfsp if and only if for each i ∈ N , there exists xi ∈ R++ such that
0 Ii xi .

Theorem 2 When the domain of preference profiles is restricted to Rfsp the

uniform solution concept is the only concept which is Pareto efficiency, envy-
free, and one-sided resource monotonic.

14