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Wednesday, December 21, 2016

Two People With An Apple, How to Share Fairly?

The question may sounds like typical IQ question, but I find the answer interesting and immediately reminds me of the common situation in estate planning and distribution, which is why I thought to share it here. So let's try to answer this.


How would you do?



Take it simple...
Mathematically, you would be thinking how to cut it into halves, how to make sure that the cut passes through the precise center of the apple and even the angle of the knife cutting through. 


Try to be smart...
IQ question cannot be that easy! So the best way you can come out with is to make them into apple juice and divide equally. That's much more quantifiable compare to cutting it. 

The answer is...
Cut and Choose method or also known as "I Cut, You Choose". Basically it means one person divides the apple into what they believe are equal halves, and the other person chooses the "half" they prefer. Thus, the person that cutting the apple would want to divide as fairly as possible, so that he or she will not be left with an undesirable portion. 


无怨一定公平,但是公平不一定无怨。


Envy-Free Fair Division.
Thru cut and choose method, both party would be satisfied without complaints, so this is an envy-free fair division. Fair division relates so much to the real life problem such as the divorce settlement or even estate distribution, which causes a lot of family dispute



Taken from one of the slides in my "Estate Planning for Greater Family Happiness" talk. 






Through the above example, you can tell fair might not be equal and equal might not be fair. So most importantly, it is the Envy-Free Fair Division solution that is needed to avoid all the complications in the future for estate distribution. No amount of money can compensate for a shattered family. So it is important for you to do your estate planning well now!  


If you didn't get the answer right for the apple distribution,
what about all of your assets which is much more complicated?


Till then. 
Happy planning! ;)

2 comments:

  1. Interesting, Henry! Happy holidays!

    ReplyDelete
    Replies
    1. Thanks Shirley! Merry Christmas and Happy Holiday!

      Delete

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