Contractual Solutions to the Hold-Up Problem
نویسندگان
چکیده
منابع مشابه
Does Evolution Solve the Hold-Up Problem?
The paper examines the theoretical foundations of the hold–up problem. At a first stage, one agent decides on the level of a relationship– specific investment. There is no contract, so at a second stage the agent must bargain with a trading partner over the surplus that the investment has generated. We show that the conventional underinvestment result hinges crucially both on the assumed bargai...
متن کاملUnobservable Investment and the Hold-Up Problem†
We study a two person bargaining problem in which the buyer may invest and increase his valuation of the object before bargaining. We show that if all offers are made by the seller and the time between offers is small, then the buyer invests efficiently and the seller extracts all of the surplus. Hence, bargaining with frequently repeated offers remedies the hold-up problem even when the agent ...
متن کاملDoes Competition Solve the Hold-up Problem?∗
In an environment in which both buyers and sellers can undertake match specific investments, the presence of market competition for matches may solve hold-up and coordination problems generated by the absence of complete contingent contracts. In particular, this paper shows that when matching is assortative and sellers‘ investments precede market competition then investments are constrained eff...
متن کاملInformation Control in the Hold-up Problem∗
Hold-up risks can be mitigated by creating asymmetric information about the investment using information control. In this paper, we study the investment level and welfare achievable with information control and the information structure that implements them. Our main result identifies a separation between information that creates ex-ante investment incentive and information that causes ex-post ...
متن کاملOwnership, incentives, and the hold-up problem
Vertical integration is often proposed as a way to resolve hold-up problems, ignoring the empirical fact that division managers tend to maximize divisional (not firmwide) profit when investing. This paper develops a model with asymmetric information at the bargaining stage and investment returns taking the form of cash and “empire benefits.” Owners of a vertically integrated firm then will prov...
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ژورنال
عنوان ژورنال: The Review of Economic Studies
سال: 1992
ISSN: 0034-6527
DOI: 10.2307/2297997