Efficient resolution of partnership disputes

Cederic Wasser

New publication by Daniel Fershtman, Béla Szabadi, and Cédric Wasser in RAND Journal of Economics


"We study efficient resolution of partnership disputes in which, departing from the partnership dissolution literature, dissolution need not be efficient. We characterize which disputes can be resolved efficiently under both one- and two-sided private information, and show that unless a partnership is sufficiently ineffective, efficient resolution is impossible. We propose simple dispute-resolution procedures implementing the efficient outcome whenever possible. Finally, we characterize second-best mechanisms when efficient resolution is impossible and private information is one sided."

Cite article: Daniel Fershtman, Béla Szabadi, and Cédric Wasser: "Efficient resolution of partnership disputes", RAND Journal of Economics, 54(4), 543-569, Winter 2023.

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