I once read an interpretation of the Solomon / baby / prostitutes story that went something like this:
The story was really a politcal allegory. The northern tribes were preparing to rebel following the death of David, and Solomon wanted desperately to keep the kingdom together. So he had the baby /sword/prostitute story circulated far and wide, the meaning of which was, "I am perfectly willing to use the sword to divide the nation and will fight a long, bloody civil war if necessary. This will result in the death of untold thouands, as well as the likely destruction of our young kingdom. However, if you northerners are smart, you will be willing to "give up the baby" (allow me to rule over you all). Better to live as a united nation under me than be weakened by a civil war & ruled over by some invading army".
The Bible account says something to teh effect that all the tribes of Israle were in "fear and trembling" over th wisdom of Solomon. Why would they be in fear and trembling over a nice little story about a baby who got back to his true mother? The explanation that fits is that the tribes were afraid that what Solomon stated would come true, and so remained united under him.