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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Equal sharing rules in partnerships |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Institutional and Theoretical Economics JITE |
| Publisher | Mohr Siebeck |
| Geographical Reach | international |
| ISSN | 0932-4569 |
| Volume | 166 |
| Number | 2 |
| Page Range | 299 - 320 |
| Date | 2010 |
| Abstract Text | Partnerships are the prevalent organizational form in many industries. Profits are most frequently shared equally among the partners. The purpose of our paper is to provide a rationale for equal sharing rules. We show that with inequity averse partners the equal sharing rule is the unique sharing rule that maximizes the partners' incentives to exert effort. We further show that inequity aversion can enhance efficiency in partnerships of given size, but that it can also cause partnerships to be inefficiently small. |
| Digital Object Identifier | 10.1628/093245610791342987 |
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