RT Journal Article
T1 Efficient partnership dissolution under buy-sell clauses
A1 Frutos, María Ángeles de
A1 Kittsteiner, Thomas
AB 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.
PB RAND/Wiley-Blacwell
SN 0741-6261
YR 2008
FD 2008
LK https://hdl.handle.net/10016/15091
UL https://hdl.handle.net/10016/15091
LA eng
NO We have benefited from comments by Richard Brooks, Erik Eyster, Paul Klemperer,Wolfgang Köhler,Meg Meyer, Benny Moldovanu, Nicola Persico, Georges Siotis, Kathy Spier, anonymous referees, the editor, as well as participants at the Second Game TheoryWorld Congress in Marseille (July 2004) and at the Economic Design Conference in Mallorca (June 2004). The authors would like to thank Nuffield College, Oxford, for its hospitality and support during the preparation of this article. The first author’s research was supported by the Spanish Ministerio de Educacion (grant SEJ 2007-67436). Studying a sample of 297 two-parent U.S. joint ventures, Hauswald and Hege (2003) report that in 34% of them there was a buyout and in 20% there was either a liquidation or sale to a third party.
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RD 18 may. 2024