Partnership Dissolution and Proprietary Information
AbstractThis paper studies different rules in dissolving a common value partnership where one partner holds proprietary information. In winner's bid auction (WBA) and loser's bid auction (LBA), there exists a unique mixed strategy equilibrium. ``Payoff equivalence'' is established in the sense that partners' expected payoffs are the same under the two auction formats. The informed partner benefits from an information rent while the uninformed suffers from an ``ownership's curse''. When cake-cutting mechanism (CCM) is applied, whether pure strategy equilibrium exists or not depends on the identity of the proposer. If the uninformed partner is the proposer, the informed partner receives an information rent in a pure strategy equilibrium. If the informed partner is the proposer, the asset value is shared equally between the two parties in a mixed strategy equilibrium. The paper then compares the information rents and prices offered for proprietary information by the three rules.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 12505.
Date of creation: Jan 2009
Date of revision:
partnership dissolution; proprietary information; winner's bid auction; loser's bid auction; cake-cutting mechanism;
Find related papers by JEL classification:
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-10 (All new papers)
- NEP-CDM-2009-01-10 (Collective Decision-Making)
- NEP-CTA-2009-01-10 (Contract Theory & Applications)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kittsteiner, Thomas, 2003.
"Partnerships and double auctions with interdependent valuations,"
Games and Economic Behavior,
Elsevier, vol. 44(1), pages 54-76, July.
- Kittsteiner, Thomas, 2000. "Partnerships and Double Auctions with Interdependent Valuations," Sonderforschungsbereich 504 Publications 01-15, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- María-Angeles de Frutos & Thomas Kittsteiner, 2008.
"Efficient partnership dissolution under buy-sell clauses,"
RAND Journal of Economics,
RAND Corporation, vol. 39(1), pages 184-198.
- María Angeles de Frutos & Thomas Kittsteiner, 2006. "Efficient partnership dissolution under buy-sell clauses," Economics Working Papers we072816, Universidad Carlos III, Departamento de Economía.
- Kittsteiner, T. & De Frutos & M-A, 2004. "Efficient Partnership Dissolution under Buy/Sell Clauses," Econometric Society 2004 Latin American Meetings 314, Econometric Society.
- Maria Angeles de Frutos & Thomas Kittsteiner, 2004. "Efficient partnership dissolution under buy/sell clauses," Bonn Econ Discussion Papers bgse1_2004, University of Bonn, Germany, revised Jul 2004.
- John L. Turner & Emanuel Ornelas, 2004.
"Efficient Dissolution of Partnerships and the Structure of Control,"
Econometric Society 2004 North American Summer Meetings
286, Econometric Society.
- Ornelas, Emanuel & Turner, John L., 2007. "Efficient dissolution of partnerships and the structure of control," Games and Economic Behavior, Elsevier, vol. 60(1), pages 187-199, July.
- Benny Moldovanu, 2002. "How to Dissolve a Partnership," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(1), pages 66-, March.
- Fieseler, Karsten & Kittsteiner, Thomas & Moldovanu, Benny, 2003.
"Partnerships, lemons, and efficient trade,"
Journal of Economic Theory,
Elsevier, vol. 113(2), pages 223-234, December.
- Moldovanu, Benny & Fieseler, Karsten & Kittsteiner, Thomas, 1999. "Partnerships, Lemons and Efficient Trade," Sonderforschungsbereich 504 Publications 01-18, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Fieseler, Karsten & Kittsteiner, Thomas & Moldovanu, Benny, 1999. "Partnerships, Lemons and Efficient Trade," Sonderforschungsbereich 504 Publications 99-71, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Jianpei Li & Elmar G. Wolfstetter, 2004.
"Partnership Dissolution, Complementarity, and Investment Incentives,"
CESifo Working Paper Series
1325, CESifo Group Munich.
- Jianpei Li & Elmar Wolfstetter, 2010. "Partnership dissolution, complementarity, and investment incentives," Oxford Economic Papers, Oxford University Press, vol. 62(3), pages 529-552, July.
- de Frutos, M. Angeles, 2000. "Asymmetric Price-Benefits Auctions," Games and Economic Behavior, Elsevier, vol. 33(1), pages 48-71, October.
- Cramton, Peter & Gibbons, Robert & Klemperer, Paul, 1987.
"Dissolving a Partnership Efficiently,"
Econometric Society, vol. 55(3), pages 615-32, May.
- Peter Cramton & Robert Gibbons & Paul Klemperer, 1985. "Dissolving a Partnership Efficiently," Working papers 406, Massachusetts Institute of Technology (MIT), Department of Economics.
- Peter Cramton & Robert Gibbons & Paul Klemperer, 1987. "Dissolving a Partnership Efficiently," Papers of Peter Cramton 87econ, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
- Dubra, Juan, 2006.
"A correction to uniqueness in "Competitive Bidding and Proprietary Information","
Journal of Mathematical Economics,
Elsevier, vol. 42(1), pages 56-60, February.
- Juan Dubra, 2004. "A Correction to Uniqueness in 'Competitive Bidding and Proprietary Information'," Game Theory and Information 0409005, EconWPA.
- Stefano Galavotti & Nozomu Muto & Daisuke Oyama, 2011. "On efficient partnership dissolution under ex post individual rationality," Economic Theory, Springer, vol. 48(1), pages 87-123, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.