The minimal number of parallel cuts required to divide a cake into n pieces is n-1. A new 3-person procedure, requiring 2 parallel cuts, is given that produces an envy- free division, whereby each person thinks he or she receives at least a tied- for- largest piece. An extension of this...

This paper studies equilibria for economies characterized by moral hazard (hidden action), in which the set of contracts marketed in equilibrium is determined by the interaction of financial intermediaries. The crucial aspect of the environment that we study is that intermediaries are restricted...