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Anti-Sharing as a Theory of Partnerships and Firms

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  • Kirstein, Roland
  • Cooter, Robert D

Abstract

Anti-Sharing may improve the efficiency of teams. The Anti-Sharer collects a fixed payment from all team members; he receives the actual output and pays out its value to them. However, if a team members assumes the role of an "internal" Anti-Sharer, he will be unproductive in equilibrium. Hence, internal Anti-Sharing fails to yield the first-best outcome. External Anti-sharing may induce the team members to choose efficient effort. The paper presents possible applications of Anti-Sharing: while internal Anti-Sharing may provide an explanation for the existence of senior (or managing) partners, external Anti-Sharing leads to a new theory of the incorporated firm.

Suggested Citation

  • Kirstein, Roland & Cooter, Robert D, 2006. "Anti-Sharing as a Theory of Partnerships and Firms," Berkeley Olin Program in Law & Economics, Working Paper Series qt4441r9r1, Berkeley Olin Program in Law & Economics.
    • Handle: RePEc:cdl:oplwec:qt4441r9r1
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    References listed on IDEAS

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    2. Kirstein, Roland & Cooter, Robert D., 2007. "Sharing and anti-sharing in teams," Economics Letters, Elsevier, vol. 96(3), pages 351-356, September.
    3. Choi, Yoon K., 1993. "Managerial incentive contracts with a production externality," Economics Letters, Elsevier, vol. 42(1), pages 37-42.
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    6. Margaret M. Blair, 2001. "Team Production Theory and Corporate Law," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 27, pages 88-95.
    7. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    8. Eric Rasmusen, 1987. "Moral Hazard in Risk-Averse Teams," RAND Journal of Economics, The RAND Corporation, vol. 18(3), pages 428-435, Autumn.
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    More about this item

    Keywords

    D23; L23; C72;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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