Schmitz, Patrick W. (2019). Incomplete contracts, limited liability, and the optimality of joint ownership. Econ. Lett., 183. LAUSANNE: ELSEVIER SCIENCE SA. ISSN 1873-7374
Full text not available from this repository.Abstract
The property rights approach to the theory of the firm is the most prominent application of the incomplete contracting paradigm. A central conclusion of the standard model says that joint ownership is suboptimal. We analyze a modified version of the standard model that is tailored to the organization of R&D activities, where one of the parties is wealth-constrained and protected by limited liability. It turns out that joint ownership can be optimal, since it avoids wasteful rent-seeking activities when limited liability rents are necessary to induce high effort. Our results are in line with the fact that R&D activities are often conducted in research joint ventures. (C) 2019 The Author. Published by Elsevier B.V.
Item Type: | Journal Article | ||||||||
Creators: |
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URN: | urn:nbn:de:hbz:38-133095 | ||||||||
DOI: | 10.1016/j.econlet.2019.108558 | ||||||||
Journal or Publication Title: | Econ. Lett. | ||||||||
Volume: | 183 | ||||||||
Date: | 2019 | ||||||||
Publisher: | ELSEVIER SCIENCE SA | ||||||||
Place of Publication: | LAUSANNE | ||||||||
ISSN: | 1873-7374 | ||||||||
Language: | English | ||||||||
Faculty: | Unspecified | ||||||||
Divisions: | Unspecified | ||||||||
Subjects: | no entry | ||||||||
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Refereed: | Yes | ||||||||
URI: | http://kups.ub.uni-koeln.de/id/eprint/13309 |
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