Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104248
Authors: 
Bartling, Björn
Siemens, Ferdinand von
Year of Publication: 
2007
Series/Report no.: 
Munich Discussion Paper 2007-29
Abstract: 
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.
Subjects: 
equal sharing rule
partnerships
incentives
peer pressure
inequity aversion
JEL: 
D20
D86
J54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.