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Can a specific performance contract solve the hold-up problem?
[Un contrat à obligation d’exécution peut-il résoudre le problème du hold-up ?]

Author

Listed:
  • M’hand Fares

    (AGIR - AGroécologie, Innovations, teRritoires - INRA - Institut National de la Recherche Agronomique - Toulouse INP - Institut National Polytechnique (Toulouse) - UT - Université de Toulouse, UP1 - Université Paris 1 Panthéon-Sorbonne)

Abstract

This paper aims to define the conditions under which a specific performance contract can solve the hold-up problem. We mainly show two results. First, in a very general environment the efficient solution is achieved only with renegotiation design. Second, in a specific environment where the valuation functions satisfy a separability condition, the efficient solution is implemented only because there is an equivalence result between this condition and a state independence assumption. This implies that a specific performance contrat is unecessary since a voluntary contract is also able to achieve efficiency.

Suggested Citation

  • M’hand Fares, 2011. "Can a specific performance contract solve the hold-up problem? [Un contrat à obligation d’exécution peut-il résoudre le problème du hold-up ?]," Post-Print hal-02647357, HAL.
    • Handle: RePEc:hal:journl:hal-02647357
    DOI: 10.3917/reco.623.0545
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02647357
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    References listed on IDEAS

    as
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