IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

The Legality of Vertical Restraints by the Rule of Reason and the Character of the Specific Investments

Listed author(s):
  • Agamirova, Maria Å.

    ()

    (National Research University — Higher School of Economics)

  • Dzagurova, Nataliya B.

    ()

    (National Research University — Higher School of Economics)

Registered author(s):

    The underinvestment in the specific assets due to the “hold up” is one of the key issues in the theory of the firm. Till the very end of the twentieth century discussing the “hold up” problem researchers considered only the so-called “selfish” relation-specific investments. But later their attention was switched to the analysis of another specific investments type, named “cooperative” or “cross” investments, which is much more risky than the selfish investments. Besides that, the riskiness of such investments depends on their specifity degree — the specific investments can be partly specific or full specific. In its turn, the degree of specifity determined by the partners’ ability to benefit from selfish or cooperative specific investments in contacts with “alternative” contractors. If such gains equal zero, that specific investments (cooperative or selfish) are full specific to the “main” partner. Respectively, if the gains from partnership with “alternative” contractors are more than zero, that such specific investments are partly specific to the “main” partner. Unfortunately the present regulatory documents, determining the application the rule of reason, don’t take into account the character of specific investments. The negative consequences of such approach are illustrated in the first part of the article, where the court’s decision in case of Pierre Fabre Dermo-Cosmetique SAS (PFDC) v. President de l’Autorite de la concurrence, Ministre de l’Economie, de l’Industrie et de l’Emploi is analyzed. The second part of the article is dedicated to the discussion of possible solutions of this problem.

    If 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.

    File URL: ftp://w82.ranepa.ru/rnp/ecopol/ep1666.pdf
    Download Restriction: no

    Article provided by Russian Presidential Academy of National Economy and Public Administration in its journal Economic Policy.

    Volume (Year): 6 (2016)
    Issue (Month): (December)
    Pages: 122-137

    as
    in new window

    Handle: RePEc:rnp:ecopol:ep1666
    Contact details of provider: Postal:
    82, Vernadsky pr., 117571, Moscow

    Phone: +7 (499) 956 95 86
    Fax: (095) 564-85-80
    Web page: http://www.rane.ru/
    Email:


    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Georg Noldeke & Klaus M. Schmidt, 1995. "Option Contracts and Renegotiation: A Solution to the Hold-Up Problem," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 163-179, Summer.
    2. Oliver Hart & John Moore, 2008. "Contracts as Reference Points," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 1-48.
    3. Alexander Stremitzer, 2012. "Standard Breach Remedies, Quality Thresholds, and Cooperative Investments," Journal of Law, Economics and Organization, Oxford University Press, vol. 28(2), pages 337-359.
    4. Matthew Ellman, 2006. "Specificity Revisited: The Role of Cross-Investments," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(1), pages 234-257, April.
    5. Oliver Hart, 2013. "Noncontractible Investments and Reference Points," Games, MDPI, Open Access Journal, vol. 4(3), pages 1-20, August.
    6. Ilya Segal & Michael D. Whinston, 2000. "Exclusive Contracts and Protection of Investments," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 603-633, Winter.
    7. Дзагурова Наталия Борисовна & Агамирова Мария Евгеньевна, 2014. "Критерии Разграничения Эгоистических И Кооперативных Специфических Инвестиций," Journal of Institutional Studies Journal of Institutional Studies (Журнал институциональных исследований), CyberLeninka;Общество с ограниченной ответственностью «Гуманитарные перспективы», vol. 6(4), pages 65-76.
    8. David Meza & Mariano Selvaggi, 2007. "Exclusive contracts foster relationship-specific investment," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 85-97, 03.
    9. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    10. MacLeod, W Bentley & Malcomson, James M, 1993. "Investments, Holdup, and the Form of Market Contracts," American Economic Review, American Economic Association, vol. 83(4), pages 811-837, September.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:rnp:ecopol:ep1666. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RANEPA maintainer)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.