This article analyzes simple rules for dissolving a common value partnership in which one partner holds proprietary information. The winner’s bid auction and the loser’s bid auction are payoff equivalent and both favor the informed partner. If it is verifiable which partner is informed, the...

In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers' productivities from their education choices. In reality, firms also use sophisticated pre-employment auditing to learn workers' productivities. We characterize the trade-offs between...

In Spence’s (1973) signaling by education model and in many of its extensions, firms can only infer workers’ productivities from their education choices. In reality, firms also use sophisticated pre–employment auditing to learn workers’ productivities. We characterize the trade–offs...

The literature on partnership dissolution generally takes the dissolution decision as given and examines whether the outcome is efficient. A well-known result is that <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$k+1$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mi>k</mi> <mo>+</mo> <mn>1</mn> </mrow> </math> </EquationSource> </InlineEquation>-price auctions dissolve a partnership efficiently when the share structure is sufficiently close to equal....</equationsource></equationsource></inlineequation>

We study a partnership that anticipates its possible dissolution. In our model, partnerships form in order to take advantage of complementary skills; although new opportunities may arise that make partners’ skills useless. We characterize the optimal, incentive-compatible partnership contract...

This paper analyzes the efficiency of team production when agents exhibit other regarding preferences. It is shown that full efficiency can be sustained as an equilibrium through a budget-balancing mechanism that punishes some randomly chosen agents if output falls short of efficient level but...

We formalize a conception of authority, which is commonly defined as the right of controlling a person’s actions embedded in human assets in sociology. Due to the inalienable property of human assets, the contractible formal authority is hard to verify and enforce, while real authority...

This paper studies different rules in dissolving a common value partnership where one partner holds proprietary information. In winner's bid auction (WBA) and loser's bid auction (LBA), there exists a unique mixed strategy equilibrium. ``Payoff equivalence'' is established in the sense that...

We formalize a conception of authority, which is commonly defined as the right of controlling a person’s actions embedded in human assets in sociology. Due to the inalienable property of human assets, the contractible formal authority is hard to verify and enforce, while real authority usually...