We revisit the classic problem of fair division from a mechanism design perspective and provide an elegant truthful mechanism that yields surprisingly good approximation guarantees for the widely used solution of Proportional Fairness. This solution, which is closely related to Nash bargaining and the competitive equilibrium, is known to be not implementable in a truthful fashion, which has been its main drawback. To alleviate this issue, we propose a new mechanism, which we call the Partial Allocation mechanism, that discards a carefully chosen fraction of the allocated resources in order to incentivize the agents to be truthful in reporting their valuations. This mechanism introduces a way to implement interesting truthful outcomes in settings where monetary payments are not an option. For a multi-dimensional domain with an arbitrary number of agents and items, and for the very large class of homogeneous valuation functions, we prove that our mechanism provides every agent with at least a 1 e � 0.368 fraction of her Proportionally Fair valuation. To the best of our knowledge, this is the first result that gives a constant factor approximation to every agent for the Proportionally Fair solution. To complement this result, we show that no truthful mechanism can guarantee more than 0.5 approximation, even for the restricted class of additive linear valuations. In addition to this, we uncover a connection between the Partial Allocation mechanism and VCG-based mechanism design. We also ask whether better approximation ratios are possible in more restricted settings. In particular, motivated by the massive privatization auction in the Czech republic in the early 90s we provide another mechanism for additive linear valuations that works really well when all the items are highly demanded.
Consider the problem of allocating multiple divisible goods to two agents in a strategy-proof fashion without the use of payments or priors. Previous work has aimed at implementing allocations that are competitive with respect to an appropriately defined measure of social welfare. These results have mostly been negative, proving that no dictatorial mechanism can achieve an approximation factor better than 0.5, and leaving open the question of whether there exists a non-dictatorial mechanism that outperforms this bound. We provide a positive answer to this question by presenting an interesting non-dictatorial mechanism that achieves an approximation factor of 2 3 for this measure of social welfare. In proving this bound we also touch on the issue of fairness: we show that the proportionally fair solution, a well known fairness concept for money-free settings, is highly competitive with respect to social welfare. We then show how to use the proportionally fair solution to design our non-dictatorial strategy-proof mechanism.