Often we cooperate to extract surplus value from the government, hotels, the physics that makes operating cars cost money, or other sources - value that we could not extract individually. When I notice such a surplus I often wonder how the surplus should be split. What is fair? Purely cooperatively, without anyone trying to game the surplus-allocation-function, and assuming the stated coalitions are fixed rather than negotiable, how much of the surplus should be attributed to each contributing party?
Some concrete examples that have come up recently in real life*:
1. Matching donations. The company I work for will match donations to charity, dollar for dollar, up to a certain maximum. Viscerally, how should I feel about donating $100 to puppies**? More than $100, since puppies get $200, certainly. But less than $200, since my employer should feel puppy-love too, and presumably there's a conservation of visceral feeling law that should apply here. Further suppose that my employer's matching offer caused me to donate $100 instead of, say, $50. What math should be done and why?
2. Exemption splitting. An amicable divorce leaves two parents wondering who should claim their student daughter as a dependent. As a purely "what is fair?" financial question, how much of the tax savings from that exemption should be distributed to the father, mother, and daughter? Suppose the father's marginal tax rate is 25% and overall tax rate is 18%, and the mother's marginal rate is 15% and overall is 12%. What math should be done and why?
3. Refinancing. My friend has a debt at 12% and for silly reasons is obviously able to pay it off but cannot this year. I can pay it off, though, and so could several other people***. Assume there are 3 people including me who could pay it off, and our current expected returns on invested money are (say) 2%, 3.5%, and 6%, and for simplicity she will repay the loan plus any surplus due in one year. Who should pay off how much of the loan (say it's $5000)? I assume the 2% person should pay all of it. That's a 10% surplus - how much do each of the four of us get? What math should be done and why?
As in The Bedrock of Fairness, are there qualities of the solutions we have strong opinions on, even if we do not know the procedure which would generate solutions with those qualities?
**I do not donate to puppies.
***Assume default risk is negligible.