Joint Ownership and the Hold-Up Problem under Asymmetric Information

14 Pages Posted: 30 May 2008

See all articles by Patrick W. Schmitz

Patrick W. Schmitz

University of Cologne; Centre for Economic Policy Research (CEPR)

Date Written: September 2007

Abstract

In the standard property rights approach to the theory of the firm, joint ownership cannot be optimal, because it induces smaller investments in human capital than ownership by a single party. This result holds under the assumption that bargaining is always ex post efficient due to symmetric information. However, joint ownership can be optimal if the parties have private information about the payoffs that they can realize on their own.

Keywords: investment incentives, joint ownership, Property rights

JEL Classification: D23, D82, D86

Suggested Citation

Schmitz, Patrick W., Joint Ownership and the Hold-Up Problem under Asymmetric Information (September 2007). CEPR Discussion Paper No. DP6478, Available at SSRN: https://ssrn.com/abstract=1138591

Patrick W. Schmitz (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://schmitz.uni-koeln.de/index.php?s=mitarbeiter&t=schmitz

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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