Dissolving a Partnership Efficiently
Peter Cramton, Robert Gibbons and Paul Klemperer ,
3
( 55 )
Econometrica
615-632
May
1987
Abstract

Several partners jointly own an asset that may be traded among them. Each partner has a valuation for the asset; the valuations are known privately and drawn independently from a common probability distribution. We characterize the set of all incentive-compatible and interim-individually-rational trading mechanisms, and give a simple necessary and sufficient condition for such mechanisms to dissolve the partnership ex post efficiently. A bidding game is constructed that achieves such dissolution whenever it is possible.

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