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

Alexander Brown () and Rodrigo Velez ()

Games and Economic Behavior, 2016, vol. 96, issue C, 115-131

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.

Keywords: Experimental economics; No-envy; Divide-and-choose; Winner's-bid auction; Behavioral mechanism design (search for similar items in EconPapers)
JEL-codes: C91 D63 C72 (search for similar items in EconPapers)
Date: 2016
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Working Paper: The costs and benefits of symmetry in common-ownership allocation problems (2014) Downloads
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Handle: RePEc:eee:gamebe:v:96:y:2016:i:c:p:115-131