This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 104 No. 1 (January 2014)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Partnerships versus Corporations: Moral Hazard, Sorting, and Ownership Structure

Article Citation

Kaya, Ayca, and Galina Vereshchagina. 2014. "Partnerships versus Corporations: Moral Hazard, Sorting, and Ownership Structure." American Economic Review, 104(1): 291-307.

DOI: 10.1257/aer.104.1.291

Abstract

Team production takes advantage of technological complementarities but comes with the cost of free-ridership. When workers differ in skills, the choice of sorting pattern may be associated with a nontrivial trade-off between exploiting the technological complementarities and minimizing the cost of free-ridership. This paper demonstrates that whether such a trade-off arises depends (i) on how the power of incentives required for effort provision varies with workers' types, and (ii) on whether the workers are organized for production in partnerships or in corporations. These results have implications for how production is organized in different industries—in partnerships or in corporations.

Article Full-Text Access

Full-text Article

Additional Materials

Authors

Kaya, Ayca (U IA)
Vereshchagina, Galina (AZ State U)

JEL Classifications

D21: Firm Behavior: Theory
D82: Asymmetric and Private Information; Mechanism Design
G32: Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
M12: Personnel Management; Executives; Executive Compensation
M54: Personnel Economics: Labor Management


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us