Shotgun Mechanisms for Common-Value Partnerships: The Unassigned-Offeror Problem
31 Pages Posted: 21 Jun 2013 Last revised: 20 Sep 2013
Date Written: September 20, 2013
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.
Keywords: Business Deadlock, Shotgun Mechanisms, Asymmetric Information, Experiments
JEL Classification: K40, C72, C90, D82
Suggested Citation: Suggested Citation