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Partnership dissolution, complementarity, and investment incentives

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dc.creator Li, Jianpei
dc.creator Wolfstetter, Elmar
dc.date 2004
dc.date.accessioned 2013-10-16T07:00:53Z
dc.date.available 2013-10-16T07:00:53Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/18690
dc.identifier ppn:477404790
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/18690
dc.description We study a partnership that anticipates its possible dissolution. In our model, partnerships form in order to take advantage of complementary skills; although new opportunities may arise that make partners? skills useless. We characterize the optimal, incentive-compatible partnership contract that can be implemented by a simple call option, and then analyze the commonly used buy?sell provision. We show that this dissolution rule gives rise to inefficiency, either in the form of excessive dissolutions combined with underinvestment or efficient dissolutions combined with overinvestment. However, supplementing the buy?sell provision with the right to veto may restore efficiency.
dc.language eng
dc.relation CESifo working papers 1325
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject L24
dc.subject J12
dc.subject D82
dc.subject K12
dc.subject C78
dc.subject ddc:330
dc.subject Partnerschaftsgesellschaft
dc.subject Anreizvertrag
dc.subject Realoption
dc.subject Qualifikation
dc.subject Theorie
dc.title Partnership dissolution, complementarity, and investment incentives
dc.type doc-type:workingPaper

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