EconPapers    
Economics at your fingertips  
 

The Division of Ownership in New Ventures

Dominique Demougin () and Oliver Fabel ()

No SFB649DP2006-047, SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649

Abstract: The current study investigates a tripartite incentive contract between an innovator supplying an intellectual asset, a professional assigned to productive tasks, and a consulting firm specializing in matching ideas and professional skills. A rather simple pure tripartite partnership implements the consultant´s expected profit maximum and maximizes the project`s expected surplus. The liquidity-constrained professional is compensated by receiving a share of one half in the new venture. The consultant´s and the innovator´s shares reflect the relative value of search. However, the consultant´s optimal search effort to find an appropriate production partner is inefficiently low.

Keywords: New ventures; tripartite incentive contract; consulting contract; partnerships (search for similar items in EconPapers)
JEL-codes: M13 M21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-ent
Date: 2006-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2006-047.pdf (application/pdf)

Related works:
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:hum:wpaper:sfb649dp2006-047

Access Statistics for this paper

More papers in SFB 649 Discussion Papers from Humboldt University, Collaborative Research Center 649 Contact information at EDIRC.
Bibliographic data for series maintained by RDC-Team ().

 
Page updated 2019-11-11
Handle: RePEc:hum:wpaper:sfb649dp2006-047