Shotgun Mechanisms for Common-Value Partnerships: The Unassigned-Offeror Problem
Claudia M. Landeo
University of Alberta - Department of Economics; University of Alberta - Institute for Public Economics
Kathryn E. Spier
Harvard University - Law School - Faculty; National Bureau of Economic Research (NBER)
September 20, 2013
Economics Letters, Forthcoming
Shotguns clauses are commonly included in the business agreements of partnerships and limited liability companies (LLCs), but the role of offeror typically remains unassigned. In a common-value, one-sided asymmetric information setting, unfair and inefficient outcomes occur with an unassigned offeror. Experimental results are aligned with our theory.
Number of Pages in PDF File: 31
Keywords: Business Deadlock, Shotgun Mechanisms, Asymmetric Information, Experiments
JEL Classification: K40, C72, C90, D82
Date posted: June 21, 2013 ; Last revised: September 20, 2013
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