Oligopsony Power, Asset Specificity, and Hold-Up: Evidence from the Broiler Industry
In this article we look for empirical evidence of hold-up in broiler industry production contracts by using the cross-sectional national survey of broiler growers. First, we focus on the problem of under-investment and hypothesize that the degree of agent's (grower's) under-investment systematically depends on the principal's (integrator's) market power and the level of asset specificity. Second, we provide an indirect test of hold-up by looking at the grower contract payoffs as a function of the frequency of the housing facilities upgrade requests and the principal's market power. The results show moderate empirical support for the presence of hold-up. Copyright 2006, Oxford University Press.
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Volume (Year): 88 (2006)
Issue (Month): 3 ()
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