Dissolving a Partnership Securely

21 Pages Posted: 29 Mar 2017

See all articles by Matt Van Essen

Matt Van Essen

University of Alabama

John Wooders

New York University Abu Dhabi; University Technology Sydney

Date Written: February 27, 2017

Abstract

We characterize security strategies and payoffs for three mechanisms for dissolving partnerships: the Texas Shoot-Out, the K 1 auction, and the compensation auction. A security strategy maximizes a participant's minimum payoff, and represents a natural starting point for analysis when a participant is either uncertain of the environment or uncertain of whether his rivals will play equilibrium. For the compensation auction, a dynamic dissolution mechanism, we introduce the notion of a perfect security strategy. Such a strategy maximizes a participant's minimum payoff along every path of play. We show that the compensation auction has a unique such strategy.

Keywords: partnership, security strategy, maximin

JEL Classification: C72, C78, D44, D82

Suggested Citation

Van Essen, Matt and Wooders, John C., Dissolving a Partnership Securely (February 27, 2017). Available at SSRN: https://ssrn.com/abstract=2942611 or http://dx.doi.org/10.2139/ssrn.2942611

Matt Van Essen

University of Alabama ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

John C. Wooders (Contact Author)

New York University Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates
+971 126285802 (Phone)

HOME PAGE: http://johnwooders.com

University Technology Sydney ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

HOME PAGE: http://johnwooders.com/

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