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The costs and benefits of symmetry in common-ownership allocation problems

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  • Brown, Alexander L.
  • Velez, Rodrigo A.

Abstract

In experimental partnership dissolution problems with complete information, the divide-and-choose mechanism is significantly superior to the winner's-bid auction. The performance of divide-and-choose is mainly affected by reciprocity issues and not by bounded rationality. The performance of the winner's-bid auction is significantly affected by bounded rationality. Contrary to theoretical predictions divide-and-choose exhibits no first-mover bias.

Suggested Citation

  • Brown, Alexander L. & Velez, Rodrigo A., 2016. "The costs and benefits of symmetry in common-ownership allocation problems," Games and Economic Behavior, Elsevier, vol. 96(C), pages 115-131.
    • Handle: RePEc:eee:gamebe:v:96:y:2016:i:c:p:115-131
    DOI: 10.1016/j.geb.2016.01.008
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    Cited by:

    1. Alexander L. Brown & Rodrigo A. Velez, 2019. "Empirical bias and efficiency of alpha-auctions: experimental evidence," Papers 1905.03876, arXiv.org, revised Jul 2020.
    2. Nicolò, Antonio & Velez, Rodrigo A., 2017. "Divide and compromise," Mathematical Social Sciences, Elsevier, vol. 90(C), pages 100-110.
    3. Rodrigo A. Velez & Alexander L. Brown, 2018. "Empirical Equilibrium," Papers 1804.07986, arXiv.org, revised Jul 2020.
    4. Hyndman, Kyle, 2021. "Dissolving partnerships under risk: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 702-720.

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    More about this item

    Keywords

    Experimental economics; No-envy; Divide-and-choose; Winner's-bid auction; Behavioral mechanism design;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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