Andi, Chris, and Kim must make a fair division of a car left to them by their father. Using the Knaster inheritance procedure, the values they bid on the car are given below. Find the results of the fair division.
$\begin{array}{lccc}
&\text { Andi}& \text { Chris}& \text { Kim }\
\text { Car } &\$ 2400& \$ 3000& \$ 2700
\end{array}$

A) Chris gets the car and pays $1900; Andi gets $900, and Kim gets $1000.
B) Chris gets the car, Andi gets $800; Kim gets $900.
C) Chris gets the car and pays $1500; Andi gets $1200, and Kim gets $1350.
D) Chris gets the car and pays $2550; Andi gets $1200, and Kim gets $1350.

Question

Andi, Chris, and Kim must make a fair division of a car left to them by their father. Using the Knaster inheritance procedure, the values they bid on the car are given below. Find the results of the fair division.
$\begin{array}{lccc}
 &\text { Andi}& \text { Chris}& \text { Kim }\
 \text { Car } &\$ 2400& \$ 3000& \$ 2700
\end{array}$

A) Chris gets the car and pays $1900; Andi gets $900, and Kim gets $1000.
B) Chris gets the car, Andi gets $800; Kim gets $900.
C) Chris gets the car and pays $1500; Andi gets $1200, and Kim gets $1350.
D) Chris gets the car and pays $2550; Andi gets $1200, and Kim gets $1350.

Quizplus · Accepted Answer

Chris, who values the car the most, gets it. The fair division is calculated by taking the average of the bids, which is $(2400 + 3000 + 2700) / 3 = $2700. Chris pays this amount into the pot. The overpayment by Chris ($3000 - $2700 = $300) is divided among Andi and Kim to compensate for their lower valuations, resulting in Andi receiving $900 and Kim $1000.

Andi, Chris, and Kim Must Make a Fair Division of a Car