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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26020
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| Title: | What to Put on the Table |
| Authors: | Skreta, Vasiliki
Figueroa, Nicolas |
| Keywords: | mechanism design
multiple units
partnerships |
| Issue Date: | Aug-2007 |
| Series/Report no.: | EC-08-11 |
| Abstract: | This paper investigates under which circumstances negotiating
simultaneously over multiple issues or assets helps reduce ine¢
ciencies due to the presence of asymmetric information. We Önd that
a simultaneous negotiation over multiple assets that are substitutes
reduces ine¢ ciencies. The e§ect is stronger if goods are
heterogeneous, and in this case the ine¢ ciency can be eliminated
altogether. When assets are not substitutes ine¢ ciencies always
prevail. We also study cases where co-ownership is possible
(partnerships), allowing for asymmetric distributions, general valuation
functions and for multiple assets. We show that e¢ cient
dissolution is possible if all agents valuations at their types where
gains of trade are minimal are equal: For this to hold, the agent that
most likely has the highest valuation for a given asset should initially
own a bigger share of that asset. We discuss implications of these
Öndings for the design of partnerships and joint ventures. |
| URI: | http://hdl.handle.net/2451/26020 |
| Appears in Collections: | Economics Working Papers
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