Shotgun Mechanisms for Common-Value Partnerships: The Unassigned-Offeror Problem

31 Pages Posted: 21 Jun 2013 Last revised: 20 Sep 2013

Claudia M. Landeo

University of Alberta - Department of Economics

Kathryn E. Spier

Harvard University - Law School - Faculty; National Bureau of Economic Research (NBER)

Date Written: September 20, 2013

Abstract

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

Landeo, Claudia M. and Spier, Kathryn E., Shotgun Mechanisms for Common-Value Partnerships: The Unassigned-Offeror Problem (September 20, 2013). Economics Letters, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2282204 or http://dx.doi.org/10.2139/ssrn.2282204

Claudia M. Landeo

University of Alberta - Department of Economics ( email )

Henry Marshall Tory Building 7-25
Edmonton, Alberta T6G 2H4
Canada

HOME PAGE: http://sites.google.com/a/ualberta.ca/claudia-m-landeo-s-home-page/home

Kathryn E. Spier (Contact Author)

Harvard University - Law School - Faculty ( email )

1575 Massachusetts
Hauser 302
Cambridge, MA 02138
United States
(617) 496-0019 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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