Is There a Hold–up Problem?

نویسندگان

  • Tore Ellingsen
  • Magnus Johannesson
  • Mats Ekelund
  • Freddie Henriksson
  • Douglas Lundin
  • Arvid Nilsson
  • Joakim Ramsberg
چکیده

Most literature on the hold–up problem assumes that ex post bargaining outcomes are insensitive to prior investment costs. However, many bargaining procedures admit multiple equilibria and hence allow investment costs to affect bargaining outcomes. On the other hand, multiplicity of equilibria leaves scope for coordination failure. We report on three experiments in which unilateral investment is followed by bilateral bargaining according to Nash’s demand game. The experiments confirm that bargaining outcomes depend on sunk costs. There is also evidence of inefficient bargaining outcomes due to coordination failure. Communication facilitates coordination, but not perfectly. Successful coordination occurs predominantly on “fair” outcomes. Sellers (investors) do at least as well under buyer authority as under seller authority. JEL classification: L14, C78.

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تاریخ انتشار 1999