The John M. Olin Center
Paper Abstract
754. Claudia M. Landeo & Kathryn E. Spier, Shotgun Mechanisms for Common-Value Partnerships: The Unassigned-Offeror Problem, 09/2013; subsequently published in Economics Letters, Vol. 121 (2013).
Abstract: Shotguns clauses are commonly included in the business agreements of partnerships and limited liability companies (LLCs), but the role of offeror typically remains unassigned. In a common-value, one-sided asymmetric information setting, unequal and inefficient outcomes occur with an unassigned offeror. Experimental results are aligned with our theory.