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Value Of The Status Quo And Efficient Partnership Dissolution

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  • Murali Agastya
  • Oleksii Birulin

Abstract

Allowing the value of an asset to depend on the ownership structure, we study ex post efficient (EPEF) dissolution of a partnership in a multidimensional independent private value (IPV) environment. The status‐quo may now be an EPEF outcome. Under mild support restrictions, we show that no partnership can be dissolved. Moreover, when the restrictions fail, one can dissolve a highly skewed partnership but not the equal partnership. These results are in stark contrast to the literature that follows Cramton et al. (Econometrica 55 (1987), 615–32) where an even allocation of initial property rights ensures efficient dissolution.

Suggested Citation

  • Murali Agastya & Oleksii Birulin, 2018. "Value Of The Status Quo And Efficient Partnership Dissolution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(4), pages 2023-2042, November.
    • Handle: RePEc:wly:iecrev:v:59:y:2018:i:4:p:2023-2042
    DOI: 10.1111/iere.12328
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    Cited by:

    1. Eric S. Chou & Meng-Yu Liang & Cheng-Tai Wu, 2022. "Reorganizing a partnership efficiently," Review of Economic Design, Springer;Society for Economic Design, vol. 26(2), pages 233-246, June.

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