Athanassoglou, Stergios and Brams, Steven J. and Sethuraman, Jay (2008): Minimizing regret when dissolving a partnership.
Download (203kB) | Preview
We study the problem of dissolving an equal-entitlement partnership when the objective is to minimize maximum regret. We initially focus on the family of linear-pricing mechanisms and derive regret-optimizing strategies. We also demonstrate that there exist linear-pricing mechanisms satisfying ex-post efficiency. Next, we analyze a binary-search mechanism which is ex-post individually rational. We discuss connections with the standard Bayesian-Nash framework for both linear and binary-search mechanisms. On a more general level, we show that if entitlements are unequal, ex-post efficiency and ex-post individual rationality impose significant restrictions on permissible mechanisms. In particular, they rule out both linear and binary-search mechanisms.
|Item Type:||MPRA Paper|
|Original Title:||Minimizing regret when dissolving a partnership|
|Keywords:||Partnership dissolution; minimax regret; fair division; allocative efficiency|
|Subjects:||D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict ; Conflict Resolution ; Alliances ; Revolutions
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games
|Depositing User:||Steven J. Brams|
|Date Deposited:||16. Jan 2009 17:53|
|Last Modified:||01. Jun 2015 04:06|
D. Bergemann and K. Schlag (2005). "Robust Monopoly Pricing," Yale University, Cowles Foundation Discussion Paper 1527
A. Borodin and R. El-Yaniv (1998). Online Computation and Competitive Analysis, Cambridge University Press.
R. R. Brooks and K. E. Spier (2004). "Trigger Happy or Gun Shy? Dissolving Common-Value Partnerships with Texas Shootouts," School of Law, Northwestern University, Law and Economics Paper 19.
K. Chatterjee and W. Samuelson (1983). "Bargaining under Incomplete Information," Operations Research 31, 835-851.
P. Cramton, R. Gibbons, and P. Klemperer (1987). "Dissolving a Partnership Efficiently," Econometrica 55, 615-632.
S. Eren and C Maglaras (2006). "Pricing without Market Information," Graduate School of Business, Columbia University, working paper.
M. Y. Gerchak and J. D. Fuller (1992). "Optimal-Value Declaration in 'Buy-Sell' Situations," Management Science 38, 48-56.
P. B. Linhart (2001). "Bargaining Solutions with Non-Standard Objectives," Review of Economic Design 6, 225-239.
P. B. Linhart and R. Radner (1989). "Minimax-Regret Strategies for Bargaining over Several Variables," Journal of Economic Theory 48, 152-178.
R. P. McAfee (1991). "Amicable Divorce: Dissolving a Partnership with Simple Mechanisms," Journal of Economic Theory 56, 266-293.
J. Morgan (n.d.), "Dissolving a Partnership (Un)Fairly," Hass School of Business and Department of Economics, University of California, Berkeley, working paper.
R. Myerson and M. Satterthwaite (1983). "Efficient Mechanisms for Bilateral Trading," Journal of Economic Theory 29, 265-281.
G. Perakis and G. Roels (2008). "Regret in the Newsvendor Model with Partial Information," Operations Research 56, 188-203.
L. J. Savage (1954). The Foundations of Statistics, John Wiley and Sons.
J. L. Turner (2006). "Dissolving (In)effective Partnerships," Department of Economics, University of Georgia, working paper.