Axiomatic and strategic foundations for the pairwise equal splitting rule in sequencing problems with an initial queue

We consider the sequencing problem with an initial queue from both axiomatic and strategic perspectives. First, we show that two fairness properties, namely independence of irrelevant adjacent positions swap and balanced impact of adjacent positions swap, along with the basic properties of efficiency, budget balance, individual rationality and Pareto indifference, characterize the pairwise equal splitting rule (Curiel et al. 1989). Next, we establish a strategic justification for the rule by introducing a position-negotiation game. This game is a finite-round game, with each round consisting of a sequence of bilateral bargaining sessions. We show that there is a unique subgame perfect Nash equilibrium outcome in the game; moreover, it is the agents’ net utility profile under the rule.