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 ...

xs one of ten regional umts mandated by Congress and ostabhshed in Fall 1988 to support research, educatSon, and training m surface transportation. The UC Center serves federal Regmn IX and is supported by matehmg grants from the U.S. r~epart-merit of Transportafit~;~, the Califomm Department of Transportatlon (Caltra~), and the Universlty. Based on the Berkeley Campus, UCTC draws upon exlstmg ...