Bargaining under incomplete information, fairness, and the hold-up problem

Bargaining under incomplete information, fairness, and the hold-up problem ¬リニ

This paper investigates the efficiency of incomplete contracts if the investors have heterogenous preferences implying heterogenous bargaining behavior, and if these preferences are private information. In the hold-up problem, incomplete contracts cause the proceeds of the investments to be shared by bargaining. Fair-minded individuals reject positive but unfair offers even if this causes a bar...

Ferdinand von Siemens: Bargaining under Incomplete Information, Fairness, and the Hold-Up Problem

In the hold-up problem incomplete contracts cause the proceeds of relation-specific investments to be allocated by ex-post bargaining. The present paper investigates the efficiency of incomplete contracts if individuals have heterogeneous preferences implying heterogeneous bargaining behavior and equally important preferences are private information. As the sunk investment costs can thus potent...

Bargaining under Asymmetric Information and the Hold-up Problem

The hold-up problem is considered a fundamental determinant of contractual and organizational structure. We study a model in which players first make relation-specific investments and then bargain over the price to exchange a good. We present a new form of misallocation of resources that may arise if one of the sides has private information in the bargaining phase. In general, the outcome of ba...

Bargaining under Incomplete Information, Fairness, and the Hold-up Problem * University of Innsbruck for Helpful Comments. Financial Support from the German Science Foundation (dfg)

In the hold-up problem incomplete contracts cause the proceeds of relation-specific investments to be allocated by ex-post bargaining. The present paper investigates the efficiency of incomplete contracts if individuals have heterogeneous preferences implying heterogeneous bargaining behavior and equally important preferences are private information. As the sunk investment costs can thus potent...

Bargaining under Incomplete Information