Fair and Efficient Allocation of Indivisible Mixed Manna

Abstract: We study fair division of indivisible mixed manna (items whose values may be positive, negative, or zero) among agents with additive valuations. Here, we establish that fairness -- in terms of a relaxation of envy-freeness -- and Pareto efficiency can always be achieved together. Specifically, our fairness guarantees are in terms of envy-freeness up to $k$ reallocations (EFR-$k$): An allocation $A$ of the indivisible items is said to be EFR-$k$ if there exists a subset $R$ of at most $k$ items such that, for each agent $i$, we can reassign items from within $R$ (in $A$) and obtain an allocation, $A^i$, which is envy-free for $i$. We establish that, when allocating mixed manna among $n$ agents with additive valuations, an EFR-$(n-1)$ and Pareto optimal (PO) allocation $A$ always exists. Further, the individual envy-free allocations $A^i$, induced by reassignments, are also PO. In addition, we prove that such fair and efficient allocations are efficiently computable when the number of agents, $n$, is fixed. We also obtain positive results focusing on EFR by itself (and without the PO desideratum). Specifically, we show that an EFR-$(n-1)$ allocation of mixed manna can be computed in polynomial time. In addition, we prove that when all the items are goods, an EFR-${\lfloor n/2 \rfloor}$ allocation exists and can be computed efficiently. Here, the $(n-1)$ bound is tight for chores and $\lfloor n/2 \rfloor$ is tight for goods. Our results advance the understanding of fair and efficient allocation of indivisible mixed manna and rely on a novel application of the Knaster-Kuratowski-Mazurkiewicz (KKM) Theorem in discrete fair division. We utilize weighted welfare maximization, with perturbed valuations, to achieve Pareto efficiency, and overall, our techniques are notably different from existing market-based approaches.