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

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Bartling, Björn
  • von Siemens, Ferdinand
  • Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)

Time of origin

  • 2007

Other Objects (12)