Publication:
Efficient partnership dissolution under buy-sell clauses

Thumbnail Image
Identifiers
URI: https://hdl.handle.net/10016/15091
ISSN: 0741-6261
DOI: 10.1111/j.1756-2171.2008.00009.x
Files
efficient_frutos_RJE_2008_ps.pdf (338.47 KB)
Publication date
2008
Defense date
Authors
Advisors
Tutors
Journal Title
Journal ISSN
Volume Title
Publisher
RAND/Wiley-Blacwell
Impact
Google Scholar
Export
Research Projects
Organizational Units
Journal Issue
Abstract
Buy-sell clauses are commonly used contractual provisions to determine the terms of dissolution of partnerships. Under them, 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. We point out that the selection of the proposing partner is essential for the performance of the clause. Moreover, if partners negotiate for the advantage of being the chooser, then buy-sell clauses result in an ex post efficient outcome. Such endogenous selection is consistent with how buy-sell clauses are drafted in practice.
Description
Keywords
Buy-sell clauses, Partnerships
Bibliographic citation
RAND Journal of Economics, 2008, vol. 39, nº 1, pp. 184-198
Collections
DE - Artículos de Revistas
Economists Online