Thursday, September 12, 2013

The Rent is Too Damn Fair

Game theory has always been a topic that has intrigued me. In college I took a couple classes on the subject.  So when I recalled a Dinosaur Comics strip about the "cake cutting" problem it had me looking into it on Wikipedia. It is actually a very fascinating topic. Most people know that if you have two people to divide a cake, one person should cut and the other one gets to choose first. But what if you have more people? Also, equal portions might not be the only way to divide fairly; for example, one person might like different toppings.

Determining how to divide up rent is a particularly fascinating problem because the actors in the situation want to maximize their utility of the space they are getting (i.e. nicer bedroom) and minimize the amount of rent to pay at the same time.  The calculator at Splitwise is very good at determining a rent split based on room size, unique features, etc, and is based on results from surveys of what people think is fair. When researching the room assignment-rent division problem, as its called, there is a very interesting paper on how an auction format could maximize fairness. In fact, if the actors knew what the max for each room they would be willing to spend would be, a computer could determine the best price for everyone and room assignments without actually holding an auction.

At OneWeekOneWebsite one of the weekly projects I was hoping on doing was going to be making a site to determine such assignments.  However, someone has already done a fantastic job at this. The Rent Is Too Damn Fair looks like an awesome site so I figured there was no reason for me to repeat someone else's work. I'll have to find something else to do this week.

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