Analytics Stories

CHAPTER 61Who Gets the House in the Hamptons?

Sadly, the marriage of rich New Yorkers Denny and Irene is ending in divorce. As shown in Figure 61.1 and worksheet 50_50 of the workbook DivorceNYCStyle.xlsx, the couple needs to divide the following assets (for convenience, we will classify Custody as an asset):

• Home in the Hamptons
• NYC home
• Ferrari
• Bank account
• Family jewels
• Custody of their daughter

Can analytics come up with a fair division in this situation? Political scientists Steven Brams and Alan Taylor (The Win-Win Solution, Norton, 1999) came up with an elegant solution to this problem. Their solution can be used to settle many other conflicts between two parties (such as labor and management, the Palestinians and the Israelis, and so forth).

Figure 61.1: Denny and Irene's assets

The Basic Idea

To begin, we ask Denny and Irene to allocate a total of 100 points to the assets. From Figure 61.1, we see that Denny places the most value on the bank account, and Irene places the most value on custody. For now, we assume all assets are divisible. We need to determine the fraction of each asset assigned to each party. One possible solution is to simply assign half of each asset to each person. As shown in Figure 61.1, this solution gives Denny and Irene 50 points. Clearly, giving a greater percentage of custody to Irene and more of the bank account to Denny would make ...