
Summary: 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.
organizations, ddc:330, approximate efficiency, partnership, Production theory, theory of the firm, L22, moral hazard, Other game-theoretic models, partnership, moral hazard, organizations, Economie, D23, free-riding, D21, jel: jel:D23, jel: jel:D21, jel: jel:L22
organizations, ddc:330, approximate efficiency, partnership, Production theory, theory of the firm, L22, moral hazard, Other game-theoretic models, partnership, moral hazard, organizations, Economie, D23, free-riding, D21, jel: jel:D23, jel: jel:D21, jel: jel:L22
| selected citations These citations are derived from selected sources. This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically). | 130 | |
| popularity This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network. | Top 10% | |
| influence This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically). | Top 1% | |
| impulse This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network. | Average |
