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Information gathering and the hold-up problem in a complete contracting framework

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  • Schmitz, Patrick W.

Abstract

A risk-neutral seller exerts effort while producing a good. The risk-neutral buyer can gather private information about his valuation. The ex ante optimal contract may encourage information gathering, although it is ex post efficient to trade regardless of the valuation.

Suggested Citation

  • Schmitz, Patrick W., 2008. "Information gathering and the hold-up problem in a complete contracting framework," Economics Letters, Elsevier, vol. 101(3), pages 268-271, December.
    • Handle: RePEc:eee:ecolet:v:101:y:2008:i:3:p:268-271
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    References listed on IDEAS

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    14. Rosenkranz, Stephanie & Schmitz, Patrick W., 1999. "Know-how disclosure and incomplete contracts," Economics Letters, Elsevier, vol. 63(2), pages 181-185, May.
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    Cited by:

    1. Schmitz, Patrick W., 2010. "Contractual solutions to hold-up problems with quality uncertainty and unobservable investments," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 807-816, September.
    2. Justin Downs, 2021. "Information gathering by overconfident agents," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(3), pages 554-568, August.

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    More about this item

    Keywords

    Information gathering Hold-up problem Complete contracting;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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