In various parts of

economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

, the term free disposal implies that resources can be discarded without any cost. For example, a

fair division Fair division is the problem in game theory of dividing a set of resources among several people who have an entitlement to them so that each person receives their due share. That problem arises in various real-world settings such as division of inh ...

setting with free disposal is a setting where some resources have to be divided fairly, but some of the resources may be left undivided, discarded or donated. Examples of situations with free disposal are allocation of food, clothes jewels etc. Examples of situations ''without'' free disposal are: *

Chore division Chore division is a fair division problem in which the divided resource is undesirable, so that each participant wants to get as little as possible. It is the mirror-image of the fair cake-cutting problem, in which the divided resource is desirable ...

- since all chores must be done. * Allocation of land with an old structure - since the structure may have to be destructed, and destruction is costly. * Allocation of an old car - since the car may have to be carried away to used cars garage, and moving it may be costly. * Allocation of shares in a firm that may have debts - since the firm cannot be disposed of without paying its debts first. The free disposal assumption may be useful for several reasons: * It enables

truthful cake-cutting Truthful cake-cutting is the study of algorithms for fair cake-cutting that are also truthful mechanisms, i.e., they incentivize the participants to reveal their true valuations to the various parts of the cake. The classic divide and choose proced ...

algorithms: The option to discard some of the cake gives the players an incentive to reveal their true valuations. * It enables fast

envy-free cake-cutting An envy-free cake-cutting is a kind of fair cake-cutting. It is a division of a heterogeneous resource ("cake") that satisfies the envy-free criterion, namely, that every partner feels that their allocated share is at least as good as any other sha ...

algorithms, and more economically-efficient envy-free allocations: Discarding some of the cake helps to reduce envy. *It enables online assignment algorithms.

References

{{reflist Fair division