Implementation in Iterative Elimination of Obviously Dominated Strategies: An Experiment on King Solomon's Dilemma

Makoto Hagiwara and Fumihiro Yonekura
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Fumihiro Yonekura: School of Engineering, Tokyo Institute of Technology, Japan

No DP2020-17, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: "King Solomon's Dilemma" is based on a biblical story and this can be considered as an allocation problem for an indivisible object among two players. A social planner wants to assign the object without payment to the player whose valuation is the highest. We say that such an allocation is "first-best." We experimentally compare the relative performance of the mechanism of Mihara (Japanese Economic Review, 63(3), 420-429, 2012) and a mechanism which we modify Mihara's mechanism. We find that a modified Mihara's mechanism relatively works better than Mihara's mechanism from the following five view points: (1) the proportion of the first-best allocations; (2) the proportion of the right-player allocations; (3) resource inefficiency and wrong-player infficiency; (4) net mean efficiency; and (5) players' behavior.

Keywords: Implementation in iterative elimination of obviously dominated strategies; King Solomon's Dilemma; Mihara's mechanism; Ascending clock auctions; Laboratory experiment (search for similar items in EconPapers)
JEL-codes: C92 D44 D78 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2020-04
New Economics Papers: this item is included in nep-des, nep-exp and nep-gth
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