Introduction

Consider a group of individuals characterized by the coexistence of the potential benefit of cooperation within the group, and the conflict with respect to the way the fruit thereof is to be distributed among members. In order that this group may form a cooperative society that is organizationally stable as a voluntary association of free individuals, a prior and binding agreement on the rule for resolving such distributional conflicts as may arise among them in the future seems to be definitely needed. An important and distinctive feature of this problem of rule design is that individuals do not, and indeed cannot, necessarily foresee the issues that may possibly be in dispute, nor do they have full information as to the natural abilities and other personal characteristics of each other. The purpose of this chapter is to consider the problem of rule design paying due attention to this informational constraint.