Skip to main content

Paying the partners


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.

This is a preview of subscription content, access via your institution.


  • Brams, S. J., & Taylor, A. D. (1994). Divide the dollar: Three solutions and extensions. Theory and Decision, 37, 211–231.

    Article  Google Scholar 

  • 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 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • Tideman, T. N., & Tullock, G. (1976). A new and superior process for making social choices. Journal of Political Economy, 84, 1145–1159.

    Article  Google Scholar 

  • Young, P. (1988). Condorcet’s theory of voting. American Political Science Review, 82, 1231–1244.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Florenz Plassmann.

Additional information

We thank Hervé Moulin, William Shughart, and two anonymous referees for helpful comments.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Tideman, T.N., Plassmann, F. Paying the partners. Public Choice 136, 19–37 (2008).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:


  • Fair division
  • Aggregating opinions
  • Dirichlet distribution


  • D33
  • D72