Dissolving an ambiguous partnership
Abstract
Two partners try to dissolve a partnership that owns an asset of ambiguous value, where the value is determined ex post by a draw from an Ellsberg urn. In a within-subject experiment, subjects make decisions in three different bargaining mechanisms: unstructured bargaining, the Texas shoot-out, and a K + 1 auction. We find that the K + 1 auction is the most efficient mechanism, which is in line with theory. Free format bargaining yields a surprising number of disagreements, which are not usually observed when the partnership has a certain or risky value.
Fields of Study & Subjects
Experimental Behavioral Economics Studies
Game Theory and Voting Systems
Auction Theory and Applications
Publication details
- Journal / source
- Journal of Economic Behavior & Organization
- Volume
- 243
- Pages
- 107453–107453
- Publication date
- 6 February 2026
- Language
- EN