Information and the hold-up problem
نویسندگان
چکیده
منابع مشابه
Information and the Hold-Up Problem
We examine situations in which a party must make a sunk investment prior to contracting with a second party to purchase an essential complementary input. We study how the resulting hold-up problem is affected by the seller’s information about the investing party’s likely returns from its investment. Our principal focus is on the effects of the investment’s being observable by the non-investing ...
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 کاملBargaining 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...
متن کاملAcquisition and Disclosure of Information as a Hold-up Problem
The acquisition of information prior to sale gives rise to a hold-up situation quite naturally. Yet, while the bulk of the literature on the hold-up problem considers negotiations under symmetric information where cooperative short-cuts such as split the di¤erence capture the outcome of bargaining, in the present setting, parties negotiate under asymmetric information where the outcome must be ...
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 ...
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ژورنال
عنوان ژورنال: The RAND Journal of Economics
سال: 2009
ISSN: 0741-6261,1756-2171
DOI: 10.1111/j.1756-2171.2009.00071.x