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Efficient partnership dissolution under buy-sell clauses

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorFrutos, María Ángeles de
dc.contributor.authorKittsteiner, Thomas
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned2007-04-19T11:34:08Z
dc.date.available2007-04-19T11:34:08Z
dc.date.issued2006-12
dc.description.abstractWhen a partnership comes to an end, partners have to determine the terms of the dissolution. A well known way to do so is by enforcing a buy-sell clause. Under its rules one party offers a price for the partnership and the other party chooses whether to sell her share or buy her partner´s share at this price. It is well known that in a model with private valuations this dissolution rule may generate inefficient allocations. However, we show that if partners negotiate for the advantage of being chooser, then buy-sell clauses result in an ex-post efficient outcome. We argue that this endogenous selection of the proposer is consistent with how buysell clauses are drafted in practice. For an example with interdependent valuations, we further show that the buy-sell clause can perform better than an auction.
dc.format.extent301559 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.issn2340-5031
dc.identifier.repecwe072816
dc.identifier.urihttp://hdl.handle.net/10016/701
dc.language.isoeng
dc.language.isoeng
dc.relation.ispartofseriesUC3M Working papers. Economics
dc.relation.ispartofseries07-16
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.ecienciaEconomía
dc.subject.otherPartnership dissolution
dc.subject.otherBuy-sell clause
dc.subject.otherShootout mechanism
dc.titleEfficient partnership dissolution under buy-sell clauses
dc.typeworking paper*
dspace.entity.typePublication
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