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

Author

Listed:
  • Alexander L. Brown

    (Texas A&M University, Department of Economics)

  • Rodrigo A. Velez

    (Texas A&M University, Department of Economics)

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 predicitions divide-and-choose exhibits no first-mover bias.

Suggested Citation

  • Alexander L. Brown & Rodrigo A. Velez, 2014. "The costs and benefits of symmetry in common-ownership allocation problems," Working Papers 20141106-10001, Texas A&M University, Department of Economics.
    • Handle: RePEc:txm:wpaper:20141106-10001
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    File URL: http://respec.tamu.edu/explode.pdf
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    References listed on IDEAS

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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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