The Texas Shoot-Out under Knightian uncertainty

B-Tier
Journal: Games and Economic Behavior
Year: 2024
Volume: 146
Issue: C
Pages: 35-50

Authors (2)

Bauch, Gerrit (not in RePEc) Riedel, Frank (Universität Bielefeld)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We investigate a widely used mechanism to resolve disputes among business partners, known as Texas Shoot-Out, under Knightian uncertainty. For a non-degenerate range of intermediate valuations, an ambiguity-averse divider truthfully reveals their valuation in equilibrium. As a consequence, the resulting outcome is efficient, in contrast to the Bayesian case. With equal shares, both agents prefer ex-ante to be the chooser and would like to avoid triggering the mechanism in the first place.

Technical Details

RePEc Handle
repec:eee:gamebe:v:146:y:2024:i:c:p:35-50
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29