Hold-Up, Asset Ownership, and Reference Points-super-
AbstractWe study two parties who desire a smooth trading relationship under conditions of value and cost uncertainty. A contract fixing price works well in normal times because there is nothing to argue about. However, when value or cost is unusually high or low, one party will deviate from the contract and hold up the other party, causing deadweight losses as parties withhold cooperation. We show that allocating asset ownership and indexing contracts can reduce the incentives to engage in hold-up. In contrast to much of the literature, the driving force in our model is payoff uncertainty, rather than noncontractible investments. (c) 2009 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 124 (2009)
Issue (Month): 1 (February)
Contact details of provider:
Web page: http://mitpress.mit.edu/journals/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Oliver D. Hart, 2011.
"Noncontractible Investments and Reference Points,"
NBER Working Papers
16929, National Bureau of Economic Research, Inc.
- Bester, Helmut, 2009.
"Investments and the Holdup Problem in a Matching Market,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
263, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Bester, Helmut, 2013. "Investments and the holdup problem in a matching market," Journal of Mathematical Economics, Elsevier, vol. 49(4), pages 302-311.
- Bester, Helmut, 2009. "Investments and the holdup problem in a matching market," Discussion Papers 2009/7, Free University Berlin, School of Business & Economics.
- Bester, Helmut, 2009. "Investments and the Holdup Problem in a Matching Market," CEPR Discussion Papers 7332, C.E.P.R. Discussion Papers.
- Oliver Hart & Bengt Holmstrom, 2010.
"A Theory of Firm Scope,"
The Quarterly Journal of Economics,
MIT Press, vol. 125(2), pages 483-513, May.
- 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.
- Schmitz, Patrick W., 2009. "Contractual solutions to hold-up problems with quality uncertainty and unobservable investments," CEPR Discussion Papers 7584, C.E.P.R. Discussion Papers.
- Herweg, Fabian & Schmidt, Klaus, 2013.
"Loss Aversion and Ex Post Inefficient Renegotiation,"
Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order
79772, Verein für Socialpolitik / German Economic Association.
- Fabian Herweg & Klaus Schmidt, 2012. "Loss Aversion and Ex Post Inefficient Renegotiation," CESifo Working Paper Series 4031, CESifo Group Munich.
- Hoppe, Eva I. & Schmitz, Patrick W., 2009.
"Can Contracts Solve the Hold-Up Problem? Experimental Evidence,"
CEPR Discussion Papers
7205, C.E.P.R. Discussion Papers.
- Hoppe, Eva I. & Schmitz, Patrick W., 2011. "Can contracts solve the hold-up problem? Experimental evidence," Games and Economic Behavior, Elsevier, vol. 73(1), pages 186-199, September.
- Halonen-Akatwijuka, Maija, 2012.
"Nature of human capital, technology and ownership of public goods,"
Journal of Public Economics,
Elsevier, vol. 96(11), pages 939-945.
- Maija Halonen, 2010. "Nature of human capital, technology and ownership of public goods," The Centre for Market and Public Organisation 10/243, Department of Economics, University of Bristol, UK.
- Mathias Erlei & Wiebke Roß, 2013. "Bounded Rationality as an Essential Ingredient of the Holdup Problem," TUC Working Papers in Economics 0009, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
- Akitoshi Muramoto, 2013. "Strategic Determination of Renegotiation Costs," KIER Working Papers 877, Kyoto University, Institute of Economic Research.
- Thorsten V. Braun & Sebastian Krispin & Erik E. Lehmann, 2009.
"Entrepreneurial Human Capital, Complementary Assets, and Takeover Probability,"
Discussion Paper Series
307, Universitaet Augsburg, Institute for Economics.
- Erik Lehmann & Thorsten Braun & Sebastian Krispin, 2012. "Entrepreneurial human capital, complementary assets, and takeover probability," The Journal of Technology Transfer, Springer, vol. 37(5), pages 589-608, October.
- Braun, Thorsten V. & Krispin, Sebastian & Lehmann, Erik E., 2010. "Entrepreneurial human capital, complementary assets, and takeover probability," UO Working Papers 03-10, University of Augsburg, Chair of Management and Organization.
- Berde, Éva, 2013.
"A fundamentális transzformáció és a referenciapont szerepe a hiányos szerződések elméletében
[The role of basic transformation and reference point in the theory of incomplete contracts]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 865-885.
- Bernard Baudry & Virgile Chassagnon, 2012. "The vertical network organization as a specific governance structure: what are the challenges for incomplete contracts theories and what are the theoretical implications for the boundaries of the (hub," Journal of Management and Governance, Springer, vol. 16(2), pages 285-303, May.
- Thomas F. Hellmann & Veikko Thiele, 2012. "A Theory of the Firm based on Partner Displacement," NBER Working Papers 18495, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If references are entirely missing, you can add them using this form.