Public Choice

, Volume 136, Issue 1–2, pp 19–37 | Cite as

Paying the partners

  • T. Nicolaus Tideman
  • Florenz PlassmannEmail author


When three or more individuals with disparate talents form a business partnership, they may find it difficult to agree on how their profits will be divided. This paper explores a rule for dividing the profits that depends only on the partners’ estimates of the relative contributions of other partners. No partner can affect his own share by the input that he provides. If there is a division that is consistent with the relative contributions suggested by all partners, then the division rule assigns these shares. We provide the intuition for the division rule and investigate several of its properties.


Fair division Aggregating opinions Dirichlet distribution 


D33 D72 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Brams, S. J., & Taylor, A. D. (1994). Divide the dollar: Three solutions and extensions. Theory and Decision, 37, 211–231. CrossRefGoogle Scholar
  2. De Clippel, G., Moulin, H., & Tideman, N. (2007). Impartial division of a dollar. Journal of Economic Theory. doi: 10.1016/j.jet.2007.06.005. Google Scholar
  3. Klein, B., Crawford, R. G., & Alchian, A. A. (1978). Vertical integration, appropriable rents, and the competitive contracting process. Journal of Law and Economics, 21, 297–326. CrossRefGoogle Scholar
  4. Mumy, G. (1981). A superior solution to captain MacWhirr’s problem: An illustration of information problems and entitlement structures. Journal of Political Economy, 89, 1039–1043. CrossRefGoogle Scholar
  5. Tideman, T. N., & Tullock, G. (1976). A new and superior process for making social choices. Journal of Political Economy, 84, 1145–1159. CrossRefGoogle Scholar
  6. Young, P. (1988). Condorcet’s theory of voting. American Political Science Review, 82, 1231–1244. CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2008

Authors and Affiliations

  1. 1.Department of EconomicsVirginia Polytechnic Institute and State UniversityBlacksburgUSA
  2. 2.Department of EconomicsState University of New York at BinghamtonBinghamtonUSA

Personalised recommendations