William Thomson: “How to divide when there isn’t enough: from Aristotle, the Talmud and Maimonides to the axiomatics of resource allocation”

Excerpt

A classic allocation problem is that in which one has to distribute a perfectly divisible and homogeneous good when there is not enough to cover all agents’ demands. It encompasses many different situations (such as the bankruptcy of a firm, the division of an estate to the creditors of a deceased, or the collection of a given amount of taxes, just to name a few) and it goes as far back as the history of economic thought. The following simple example comes from the Talmud (a great source of inspiration in this context). Two men disagree on the ownership of a garment, worth 200, say. The first man claims half of it, 100, and the other claims it all, 200. Assuming both claims to be made in good faith, how should the garment be distributed? …