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“Neither I nor you shall have him”: An experimental study of the King Solomon's Dilemma

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  • Elbittar, Alexander
  • Di Giannatale, Sonia

Abstract

This paper reports the results of an experiment designed to compare two mechanisms that provide solutions to King Solomon's Dilemma. One of them is proposed by Moore (1992) and the other by Perry and Reny (1999). The objective of each mechanism is to allocate a single unit of an indivisible private good to the player with the highest reservation value at zero cost to her. Implemented in an environment with complete information Moore's mechanism, compared with Perry and Reny's mechanism, shows a lower rate of wasteful use of resources, but we could not find evidence that this mechanism has a better rate in allocating the object to the right player. The use of either the ascending clock or the slow ascending clock improves the performance of Perry and Reny's mechanism in allocating the object to the right player at zero cost in both informational environments. Finally, we find evidence of a higher likelihood of low value players staying with the object when their valuation for the object increases and when they know the valuation of their opponents; however, the monetary amount they have to pay for staying with the object plays a relevant role in this decision.

Suggested Citation

  • Elbittar, Alexander & Di Giannatale, Sonia, 2017. "“Neither I nor you shall have him”: An experimental study of the King Solomon's Dilemma," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 70(C), pages 55-69.
    • Handle: RePEc:eee:soceco:v:70:y:2017:i:c:p:55-69
    DOI: 10.1016/j.socec.2017.08.001
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    References listed on IDEAS

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    1. Perry, Motty & Reny, Philip J., 1999. "A General Solution to King Solomon's Dilemma," Games and Economic Behavior, Elsevier, vol. 26(2), pages 279-285, January.
    2. Masuda, Takehito & Okano, Yoshitaka & Saijo, Tatsuyoshi, 2014. "The minimum approval mechanism implements the efficient public good allocation theoretically and experimentally," Games and Economic Behavior, Elsevier, vol. 83(C), pages 73-85.
    3. Bag, Parimal Kanti, 1996. "Efficient Allocation of a "Pie": Divisible Case of King Solomon's Dilemma," Games and Economic Behavior, Elsevier, vol. 12(1), pages 21-41, January.
    4. Bag, Parimal Kanti & Sabourian, Hamid, 2005. "Distributing awards efficiently: More on King Solomon's problem," Games and Economic Behavior, Elsevier, vol. 53(1), pages 43-58, October.
    5. Giovanni Ponti & Anita Gantner & Dunia López-Pintado & Robert Montgomery, 2003. "Solomon's Dilemma: An experimental study on dynamic implementation," Review of Economic Design, Springer;Society for Economic Design, vol. 8(2), pages 217-239, October.
    6. H. Reiju Mihara, 2012. "The Second-Price Auction Solves King Solomon'S Dilemma," The Japanese Economic Review, Japanese Economic Association, vol. 63(3), pages 420-429, September.
    7. Aseff, Jorge G., 2004. "Learning to play second-price auctions, an experimental study," Economics Letters, Elsevier, vol. 85(2), pages 279-286, November.
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    9. Katok, Elena & Sefton, Martin & Yavas, Abdullah, 2002. "Implementation by Iterative Dominance and Backward Induction: An Experimental Comparison," Journal of Economic Theory, Elsevier, vol. 104(1), pages 89-103, May.
    10. Glazer, Jacob & Ma, Ching-To Albert, 1989. "Efficient allocation of a "prize"-King Solomon's dilemma," Games and Economic Behavior, Elsevier, vol. 1(3), pages 222-233, September.
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    12. Giovanni Ponti, 2000. "orignal paper: Splitting the baby in two: solving Solomon's dilemma with boundedly rational agents," Journal of Evolutionary Economics, Springer, vol. 10(4), pages 449-455.
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    1. Makoto Hagiwara & Fumihiro Yonekura, 2020. "Implementation in Iterative Elimination of Obviously Dominated Strategies: An Experiment on King Solomon's Dilemma," Discussion Paper Series DP2020-17, Research Institute for Economics & Business Administration, Kobe University.

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    More about this item

    Keywords

    Behavioral economics; Implementation theory; Rivalrous behavior; Laboratory experiments;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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