We show that joint ownership (partnership or joint venture) can implement first best in a twice-repeated game when each agent believes that the other party is honest with a very small probability. In the final period the ownership structure is renegotiated because joint ownership is ex post...

Focus - specialization and specific technology - improves productivity but leads to more dependency and opens a door for power problems. We analyze how organizational design and the choice of technology interact with the allocation of ownership in minimizing the holdup problem. We find a novel...