This note is a part of my Zettelkasten. What is below might not be complete or accurate. It
is also likely to change often.
The texas shootout is a method of resolving ownership and valuation disputes.
Suppose a situation where 2 partners who hold common ownership of an object (or a company) are trying to each take complete ownership. One way to resolve the conflict would be that each person submits a bit for the value of the company and the higher bid wins. The winner must pay the other partner for their share at the rate of the average of the two bids.
Assuming that each partner will win the bid at the same % as their ownership of the company. Each partner will find it in their best interest to bid the true value for keeping the company. This is because if they value higher or lower, they would have to either pay more than the actual value to the other partner or recieve less than the actual value.