EconPapers    
Economics at your fingertips  
 

Efficient and Nearly-Efficient Partnerships

Patrick Legros and Steven Matthews ()

The Review of Economic Studies, 1993, vol. 60, issue 3, 599-611

Abstract: This paper shows in two ways that the degree to which free-riding diminishes the performance of deterministic partnerships may be less than has been generally thought. First, a necessary and sufficient condition is provided for a partnership to sustain full efficiency. It implies that many non-trivial partnerships sustain efficiency, such as generic ones with finite action spaces, and neoclassical ones with Leontief technologies. Second, approximate efficiency is shown to be achievable in a large class of partnerships, including ones with smooth and monotonic production and disutility functions. Approximate efficiency is achieved by mixed-strategy equilibria: one partner takes, with small probability, an inefficient action. The degree to which efficiency is approximated is restricted only by the amount of liability the partners can bear. Nonetheless, their equilibrium payments are not arbitrarily large.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (88)

Downloads: (external link)
http://hdl.handle.net/10.2307/2298126 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Efficient and Nearly Efficient Partnerships (1992) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:60:y:1993:i:3:p:599-611.

Access Statistics for this article

The Review of Economic Studies is currently edited by Thomas Chaney, Xavier d’Haultfoeuille, Andrea Galeotti, Bård Harstad, Nir Jaimovich, Katrine Loken, Elias Papaioannou, Vincent Sterk and Noam Yuchtman

More articles in The Review of Economic Studies from Review of Economic Studies Ltd
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2025-03-19
Handle: RePEc:oup:restud:v:60:y:1993:i:3:p:599-611.