wealth-constrained and protected by limited liability. It turns out that joint ownership can be optimal, since it avoids … wasteful rent-seeking activities when limited liability rents are necessary to induce high effort. Our results are in line with …

. Under unlimited liability, the principal strictly benefits from a gap by partially insuring the agents and thereby reducing … labor costs. If the agents are protected by limited liability, the principal sticks to the standard tournament. …

economic importance of the corporate form's hallmark features: legal personality, limited liability, transferable shares …