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

S-Tier
Journal: American Economic Review
Year: 2014
Volume: 104
Issue: 1
Pages: 291-307

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

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.

Technical Details

RePEc Handle
repec:aea:aecrev:v:104:y:2014:i:1:p:291-307
Journal Field
General
Author Count
2
Added to Database
2026-01-25