Partnerships based on Joint Ownership

Matthias Blonski and Daniel Herbold

Games and Economic Behavior, 2024, vol. 144, issue C, 183-202

Abstract: In a unifying framework generalizing established theories we characterize under which conditions Joint Ownership of assets creates the best cooperation incentives in a partnership. We endogenise renegotiation costs and assume that they weakly increase with additional assets. A salient sufficient condition for optimal cooperation incentives among patient partners is if Joint Ownership is a Strict Coasian Institution for which transaction costs impede an efficient asset reallocation after a breakdown. In contrast to Halonen (2002) the logic behind our results is that Joint Ownership maximizes the value of the relationship and the costs of renegotiating ownership after a broken relationship.

Keywords: Relational contracts; Joint Ownership; Property rights; Renegotiation; Coase Theorem (search for similar items in EconPapers)
JEL-codes: D23 L22 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:144:y:2024:i:c:p:183-202

DOI: 10.1016/j.geb.2024.01.007

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