A Simple Economic Teaching Experiment on the Hold-Up Problem
The hold-up problem is central to the theory of incomplete contracts. This can occur if, after making a sunk investment in a relationship, one party can be taken advantage of by the other party, leading to inefficient underinvestment. The authors describe a simple teaching experiment that illustrates the hold-up problem, and address how to integrate it into a class.
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.
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.
Volume (Year): 43 (2012)
Issue (Month): 4 (October)
|Contact details of provider:|| Web page: http://www.tandfonline.com/VECE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/VECE20|
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.:
- Georg Nöldeke & Klaus M. Schmidt, 1992.
"Option Contracts and Renegotiation - A Solution to the Hold-Up Problem,"
Discussion Paper Serie A
417, University of Bonn, Germany, revised Aug 1993.
- 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.
- Nöldeke, Georg & Schmidt, Klaus M., 1995. "Option contracts and renegotiation: A solution to the Hold-Up Problem," Munich Reprints in Economics 19329, University of Munich, Department of Economics.
- Aghion, Philippe & Tirole, Jean, 1994.
"Formal and Real Authority in Organizations,"
IDEI Working Papers
37, Institut d'Économie Industrielle (IDEI), Toulouse.
- Philippe Aghion & Jean Tirole, 1994. "Formal and Real Authority in Organizations," Working papers 95-8, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Scholarly Articles 4554125, Harvard University Department of Economics.
- Philippe Aghion & Jean Tirole, 1994. "Normal and Real Authority in Organizations," Working papers 94-13, Massachusetts Institute of Technology (MIT), Department of Economics.
- Schmitz, Patrick W, 2001.
"The Hold-up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory,"
Bulletin of Economic Research,
Wiley Blackwell, vol. 53(1), pages 1-17, January.
- Schmitz, Patrick W., 2001. "The Hold-Up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," MPRA Paper 12562, University Library of Munich, Germany.
- Pol Antràs, 2003.
"Firms, Contracts, and Trade Structure,"
NBER Working Papers
9740, National Bureau of Economic Research, Inc.
- Harrison, Mark & Markevich, Andrei, 2007.
"Quantity Versus Quality in the Soviet Market for Weapons,"
The Warwick Economics Research Paper Series (TWERPS)
822, University of Warwick, Department of Economics.
- Mark Harrison & Andrei Markevich, 2007. "Quantity Versus Quality in the Soviet Market for Weapons," Working Papers w0109, Center for Economic and Financial Research (CEFIR).
- 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.
- Philippe Robert-Demontrond & R. Ringoot, 2004. "Introduction," Post-Print halshs-00081823, HAL.
- Coase, R H, 2000. "The Acquisition of Fisher Body by General Motors," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 15-31, April.
When requesting a correction, please mention this item's handle: RePEc:taf:jeduce:v:43:y:2012:i:4:p:377-385. 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: (Michael McNulty)
If references are entirely missing, you can add them using this form.