Specific Investments and Residual Control Rights: A Reassessment

Published in Oligopoly, institutions and firms' performance, Fanti L. (ed.), Pisa: Pisa University Press, 2017 (ISBN: 978-886741-8121).

15 Pages Posted: 25 Jul 2017 Last revised: 16 Aug 2018

See all articles by Massimiliano Vatiero

Massimiliano Vatiero

University of Trento; Università della Svizzera italiana

Date Written: July 19, 2017

Abstract

In this paper, I argue that, if the role of specific investments in transforming market configuration is seriously taken into account, then specific investments can be a safeguard from, rather than the cause of, opportunistic behaviours, and that residual control rights can reduce, rather than increase, incentives to invest.

Keywords: Incomplete Contracts, Residual Control Rights, Specific Investments, Endogenous Outside Options

JEL Classification: D23, L12, L14, L21, L22, L42

Suggested Citation

Vatiero, Massimiliano, Specific Investments and Residual Control Rights: A Reassessment (July 19, 2017). Published in Oligopoly, institutions and firms' performance, Fanti L. (ed.), Pisa: Pisa University Press, 2017 (ISBN: 978-886741-8121)., Available at SSRN: https://ssrn.com/abstract=3005706

Massimiliano Vatiero (Contact Author)

University of Trento ( email )

Via Inama, 5
Trento, Trento 38122
Italy

Università della Svizzera italiana ( email )

Via Giuseppe Buffi, n. 13
Lugano, Ticino 6900
Switzerland

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