What to put in the table
This paper investigates under which circumstances negotiating simultaneously over multiple issues or assets helps reduce inefficiencies due to the presence of asymmetric information. We find that a simultaneous negotiation over multiple assets that are substitutes reduces inefficiencies. The effect is stronger if goods are heterogeneous, and in this case the inefficiency can be eliminated altogether. When assets are not substitutes inefficiencies always prevail. We also study cases where co-ownership is possible (partnerships), allowing for asymmetric distributions, general valuation functions and for multiple assets. We show that efficient dissolution is possible if all agents valuations at their types where gains of trade are minimal are equal. For this to hold, the agent that most likely has the highest valuation for a given asset should initially own a bigger share of that asset. We discuss implications of these findings for the design of partnerships and joint ventures. JEL classification codes: C72, D82, L14.
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| Date of creation: | 2007 |
| Handle: | RePEc:edj:ceauch:237 |
| Contact details of provider: | Web page: http://www.dii.uchile.cl/cea/ More information through EDIRC
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References listed on IDEAS
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- Daniel Ferreira & Emanuel Ornelas & John L. Turner, 2015.
"Unbundling Ownership and Control,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 24(1), pages 1-21, 03.
- Ferreira, Daniel & Ornelas, Emanuel & Turner, John L., 2007. "Unbundling Ownership and Control," CEPR Discussion Papers 6257, C.E.P.R. Discussion Papers.
- Makowski Louis & Mezzetti Claudio, 1993. "The Possibility of Efficient Mechanisms for Trading an Indivisible Object," Journal of Economic Theory, Elsevier, vol. 59(2), pages 451-465, April.
- Makowski, L. & Mezzetti, C., 1989. "The Possibility Of Efficient Mechanisms For Trading In Indivisible Object," Papers 344, California Davis - Institute of Governmental Affairs.
- Patrick Schmitz, 2001. "The Coase Theorem, Private Information, and the Benefits of Not Assigning Property Rights," European Journal of Law and Economics, Springer, vol. 11(1), pages 23-28, January.
- Schmitz, Patrick W., 2001. "The Coase Theorem, Private Information, and the Benefits of Not Assigning Property Rights," MPRA Paper 6929, University Library of Munich, Germany.
- Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
- Roger B. Myerson & Mark A. Satterthwaite, 1981. "Efficient Mechanisms for Bilateral Trading," Discussion Papers 469S, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Vijay Krishna & Motty Perry, 1997. "Efficient Mechanism Design," Game Theory and Information 9703010, EconWPA, revised 28 Apr 1998.
- 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.
- 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.
- Makowski Louis & Mezzetti Claudio, 1994. "Bayesian and Weakly Robust First Best Mechanisms: Characterizations," Journal of Economic Theory, Elsevier, vol. 64(2), pages 500-519, December.
- Audra L. Boone & J. Harold Mulherin, 2007. "How Are Firms Sold?," Journal of Finance, American Finance Association, vol. 62(2), pages 847-875, 04.
- Schweizer, Urs, 2006. "Universal possibility and impossibility results," Games and Economic Behavior, Elsevier, vol. 57(1), pages 73-85, October.
- Sandro Brusco & Giuseppe Lopomo & David T. Robinson & S. Viswanathan, 2007. "Efficient Mechanisms For Mergers And Acquisitions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(3), pages 995-1035, 08. Full references (including those not matched with items on IDEAS)
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