Partnership dissolution mechanisms in the laboratory

We experimentally compare two partnership dissolution mechanisms, the widely-used buy–sell clause and the winner’s bid auction. While standard theory does well in organizing many laboratory patterns, it does not easily capture that many subjects bid valuations, especially in the buy–sell clause. As a result of this behavior, the buy–sell clause weakly outperforms the auction with respect to efficiency.

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Year of publication:	2012
Authors:	Kittsteiner, Thomas ; Ockenfels, Axel ; Trhal, Nadja
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 117.2012, 2, p. 394-396
Publisher:	Elsevier
Subject:	Partnership dissolution \| Buy–sell clause \| Shotgun clause \| Laboratory experiment

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Type of publication:	Article
Classification:	C91 - Laboratory, Individual Behavior ; D44 - Auctions ; D61 - Allocative Efficiency; Cost-Benefit Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010580500