Arbeitspapier
Equal Sharing Rules in Partnerships
Partnerships are the prevalent organizational form in many industries. Most partnerships share profits equally among the partners. Following Kandel and Lazear (1992) it is often argued that peer pressure mitigates the arising free-rider problem. This line of reasoning takes the equal sharing rule as exogenously given. The purpose of our paper is to show that with inequity averse partners - a behavioral assumption akin to peer pressure - the equal sharing rule arises endogenously as an optimal solution to the incentive problem in a partnership.
- Language
-
Englisch
- Bibliographic citation
-
Series: SFB/TR 15 Discussion Paper ; No. 217
- Classification
-
Wirtschaft
Production and Organizations: General
Economics of Contract: Theory
Producer Cooperatives; Labor Managed Firms; Employee Ownership
- Subject
-
equal sharing rule
partnerships
incentives
peer pressure
inequity aversion
- Event
-
Geistige Schöpfung
- (who)
-
Bartling, Björn
von Siemens, Ferdinand
- Event
-
Veröffentlichung
- (who)
-
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
- (where)
-
München
- (when)
-
2007
- DOI
-
doi:10.5282/ubm/epub.13335
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-13335-0
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Bartling, Björn
- von Siemens, Ferdinand
- Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
Time of origin
- 2007