Determine the average salary w/o revealing individual salaries

Problem:
There are three people and they need to know the average of their salaries without knowing each other's salary. How will you do that?

Solution:

1. Here's a simple solution. We start out assuming everyone's salary is in a certain range, say 0 - 1 trillion. The first person picks a number uniformly at random in that range and informs only the second person about this random number. Since this number is just random, it conveys no information. The second person adds their salary to the number and informs the third person about this sum. The third person receives no info from this because of the random element added in. The third person adds their salary to this running total and informs the first person about the sum. The first person knows the random number and subtracts it out, leaving the first person with the sum of the second and third person's salary. The first person could have obtained this info from the average anyway, so no extra information has been conveyed. Finally the first person adds their salary and divides by 3.

2. More secure solution: Have them pick "two" random numbers and reveal the sum of two random numbers and their salary, then sum them all up. Each developer now exchanges one of their random numbers. Now, when they subtract random numbers from the total, none of them can guess each other's salary.
Once the random numbers are subtracted, divide it by 3, which is the average salary of three developer.

The added security is to avoid the third person disclosing the sum given by the second person in the first solution. Otherwise the first person could determine the salary of the second person.

Complexity:

time - O(n)
space - O(1)

Links and credits:
http://www.careercup.com/question?id=14184700
http://www.careercup.com/question?id=19694667