Fair allocations and distortion of utilities: A note

Abstract

Given two agents with von neumann- morgenstern utilities who wish to divide n commodities, consider the two- person non- cooperative game with strategies consisting of concave, increasing von neumann- Morenstern utility functions and whose outcomes are fair allocations to the strategies used. It is shown that any equal income competitive equilibrium allocation for the true utiliites is a nash equilibrium outcome for the non- cooperative game.