An Experiment On Bankruptcy
This paper reports an experimental study on three well known solutions for bankruptcy problems, that is, the constrained equal-awards, the proportional and the constrained equal-losses rule. To do this, we first let subjects play three games designed such that the unique equilibrium outcome coincides with one of these three rules. Moreover, we also let subjects play an additional game, that has the property that all (and only) strategy profiles in which players unanimously agree on the same rule constitute a strict Nash equilibrium. While in the first three games subjects' play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device.
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| Length: | 34 pages |
| Date of creation: | Feb 2003 |
| Date of revision: | |
| Publication status: | Published by Ivie |
| Handle: | RePEc:ivi:wpasad:2003-03 |
| Contact details of provider: | Postal: C/ Guardia Civil, 22, Esc 2a, 1o, E-46020 VALENCIA Phone: +34 96 319 00 50 Fax: +34 96 319 00 55 Web page: http://www.ivie.es/ Email: More information through EDIRC
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References listed on IDEAS
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