Control Rights In Complex Partnerships
This paper develops a theory of the allocation of authority between two players who are in a “complex” partnership, that is, a partnership which produces impure public goods. We show that the optimal allocation depends on technological factors, the parties’ valuations of the goods produced, and the degree of impurity of these goods. When the degree of impurity is large, control rights should be given to the main investor, irrespective of preference considerations. There are some situations in which this allocation is optimal even if the degree of impurity is very low as long as one party’s investment is more important than the other party’s. If the parties’ investments are of similar importance and the degree of impurity is large, shared authority is optimal with a greater share going to the low-valuation party. If the importance of the parties’ investments is similar but the degree of impurity is neither large nor small, the low-valuation party should receive sole authority. We analyze an extension in which side payments are infeasible. We check for robustness of our results in several dimensions, such as allowing for multiple parties or for joint authority, apply our results to interpret a number of complex partnerships, including those involving schools and child custody. JEL Codes: D02 ; D23 ; H41 ; L31
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 9 (2011)
Issue (Month): 3 (06)
|Contact details of provider:|| Web page: http://www.eeassoc.org/|
More information through EDIRC
References listed on IDEAS
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.:
- Raghuram G. Rajan & Luigi Zingales, 1998.
"Power in a Theory of the Firm,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 113(2), pages 387-432.
- Rajan, Raghuram G & Zingales, Luigi, 1998. "Power in a Theory of the Firm," CEPR Discussion Papers 1777, C.E.P.R. Discussion Papers.
- Raghuram G. Rajan & Luigi Zingales, "undated". "Power in a Theory of the Firm," CRSP working papers 335, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Raghuram G. Rajan & Luigi Zingales, 1997. "Power in a Theory of the Firm," NBER Working Papers 6274, National Bureau of Economic Research, Inc.
- Banerjee, Abhijit & Cole, Shawn & Duflo, Esther & Linden, Leigh, 2006.
"Remedying Education: Evidence from Two Randomized Experiments in India,"
CEPR Discussion Papers
5446, C.E.P.R. Discussion Papers.
- Esther Duflo & Abhijit Banerjee & Shawn Cole & Leigh Linden, 2006. "Remedying Education: Evidence from Two Randomised Experiments in India," Working Papers id:360, eSocialSciences.
- Abhijit Banerjee & Shawn Cole & Esther Duflo & Leigh Linden, 2005. "Remedying Education: Evidence from Two Randomized Experiments in India," NBER Working Papers 11904, National Bureau of Economic Research, Inc.
- Abhijit Banerjee & Shawn Cole & Esther Duflo & Leigh Linden, 2005. "Remedying education: Evidence from two randomized experiments in india," Framed Field Experiments 00122, The Field Experiments Website.
- Bester, Helmut, 2005.
"Externalities, communication and the allocation of decision rights,"
2005/21, Free University Berlin, School of Business & Economics.
- Helmut Bester, 2009. "Externalities, communication and the allocation of decision rights," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 269-296, November.
- Helmut Bester, "undated". "Externalities, Communication and the Allocation of Decision Rights," Papers 027, Departmental Working Papers.
- Bester, Helmut, 2005. "Externalities, Communication and the Allocation of Decision Rights," CEPR Discussion Papers 5391, C.E.P.R. Discussion Papers.
- Bester, Helmut, 2005. "Externalities, Communication and the Allocation of Decision Rights," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 69, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Abhijit V. Banerjee & Shawn Cole & Esther Duflo & Leigh Linden, 2007. "Remedying Education: Evidence from Two Randomized Experiments in India," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1235-1264.
- Hanming Fang & Peter Norman, 2003.
"To Bundle or Not to Bundle,"
Cowles Foundation Discussion Papers
1440, Cowles Foundation for Research in Economics, Yale University.
- Philippe Aghion & Mathias Dewatripont & Patrick Rey, 2004.
Journal of the European Economic Association,
MIT Press, vol. 2(1), pages 115-138, 03.
- Mathias Dewatripont & Philippe Aghion & Patrick Rey, 2004. "Transferable control," ULB Institutional Repository 2013/9647, ULB -- Universite Libre de Bruxelles.
- Rey, Patrick & Dewatripont, Mathias & Aghion, Philippe, 2004. "Transferable Control," Scholarly Articles 4481511, Harvard University Department of Economics.
- Mathias Dewatripont, 2006. "Transferable control," ULB Institutional Repository 2013/9649, ULB -- Universite Libre de Bruxelles.
- Maija Halonen-Akatwijuka & Evagelos Pafilis, 2009. "Reputation and Ownership of Public Goods," The Centre for Market and Public Organisation 09/211, Department of Economics, University of Bristol, UK.
- Prat, Andrea & Strömberg, David, 2005.
"Commercial Television and Voter Information,"
CEPR Discussion Papers
4989, C.E.P.R. Discussion Papers.
- Flinn, Christopher J, 2000.
"Modes of Interaction between Divorced Parents,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(3), pages 545-578, August.
- Luca Anderlini & Leonardo Felli, 1998.
"Costly bargaining and renegotiation,"
LSE Research Online Documents on Economics
3592, London School of Economics and Political Science, LSE Library.
- Anderlini, L. & Felli, L., 1999. "Costly bargaining and renegotiation," Discussion Paper Series In Economics And Econometrics 9910, Economics Division, School of Social Sciences, University of Southampton.
- Luca Anderlini & Leonardo Felli, 1999. "Costly Bargaining and Renegotiation," CESifo Working Paper Series 213, CESifo Group Munich.
- Timothy Besley & Andrea Prat, 2005.
"Handcuffs for the Grabbing Hand? Media Capture and Government Accountability,"
STICERD - Political Economy and Public Policy Paper Series
07, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Timothy Besley & Andrea Prat, 2006. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," American Economic Review, American Economic Association, vol. 96(3), pages 720-736, June.
- Besley, Timothy J. & Prat, Andrea, 2002. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," CEPR Discussion Papers 3132, C.E.P.R. Discussion Papers.
- Imran Rasul, 2006. "The Economics of Child Custody," Economica, London School of Economics and Political Science, vol. 73(289), pages 1-25, 02.
- Martimort, David & Pouyet, Jérôme, 2006. "'Build It or Not': Normative and Positive Theories of Public-Private Partnerships," CEPR Discussion Papers 5610, C.E.P.R. Discussion Papers.
- Mark Duggan, 2000.
"Hospital Ownership and Public Medical Spending,"
NBER Working Papers
7789, National Bureau of Economic Research, Inc.
- Maija Halonen, 2002. "Reputation And The Allocation Of Ownership," Economic Journal, Royal Economic Society, vol. 112(481), pages 539-558, July.
- Alejandra Mizala & Pilar Romaguera, 2000. "School Performance and Choice: The Chilean Experience," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 392-417.
When requesting a correction, please mention this item's handle: RePEc:bla:jeurec:v:9:y:2011:i:3:p:551-589. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.