Arbeitspapier

Equal Sharing Rules in Partnerships

to connected objects

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: Munich Discussion Paper ; No. 2007-29

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
Unternehmenskooperation
Gewinnverwendung
Gerechtigkeit
Vertragstheorie
Theorie

Event: Geistige Schöpfung

(who): Bartling, Björn
Siemens, Ferdinand von

Event: Veröffentlichung

(who): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät

(where): München

(when): 2007

DOI: doi:10.5282/ubm/epub.2027

Handle: http://hdl.handle.net/10419/104248

URN: urn:nbn:de:bvb:19-epub-2027-1

Last update: 10.03.2025, 11:42 AM CET

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Object type

Arbeitspapier

Associated

Bartling, Björn
Siemens, Ferdinand von
Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät

Time of origin

2007

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