An Experiment On Bankruptcy

Moreno Ternero, Juan de Dios and Herrero Blanco, Carmen and Ponti, Giovanni (2003) An Experiment On Bankruptcy. [Working Paper]. p. 29. Working Papers. Serie AD (Submitted)

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Abstract/Index

This paper reports an experimental study on three well known solutions for bankruptcy problems, that is, the constrained equal-awards, the proportional and the constrained equal-losses rule. To do this, we first let subjects play three games designed such that the unique equilibrium outcome coincides with one of these three rules. Moreover, we also let subjects play an additional game, that has the property that all (and only) strategy profiles in which players unanimously agree on the same rule constitute a strict Nash equilibrium. While in the first three games subjects' play easily converges to the unique equilibrium rule, in the last game the proportional rule overwhelmingly prevails as a coordination device.


Item Type:Report / Paper (Working Paper)
Research documents and activity classification:Working Papers > Non-Refereed Working Papers / of national relevance only
Divisions:Department of Business and Management
MIUR Scientific Area:Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited By:Maria Teresa Nistico
Deposited On:16 Dec 2010 14:29
Last Modified:23 Apr 2013 14:58

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