In various parts of
economics
Economics () is the social science that studies the production, distribution, and consumption of goods and services.
Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...
, the term free disposal implies that resources can be discarded without any cost. For example, a
fair division 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 desirabl ...
- 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 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 s ...
algorithms,
and more economically-efficient envy-free allocations: Discarding some of the cake helps to reduce envy.
*It enables online assignment algorithms.
References
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Fair division