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Claudia M. Landeo & Kathryn E. Spier, Shotgun Mechanisms for Common-Value Partnerships: The Unassigned-Offeror Problem, 121 Econ. Letters 390 (2013).


Abstract: Shotgun clauses are commonly included in the business agreements of partnerships and limited liability companies (LLCs), but the role of offeror typically remains unassigned. In a common-value, one-sided asymmetric information setting, unequal and inefficient outcomes occur with an unassigned offeror. Experimental results are aligned with our theory.