Incomplete Contracts, the Hold-Up Problem and Asymmetric Information

15 Pages Posted: 23 May 2008

See all articles by Patrick W. Schmitz

Patrick W. Schmitz

University of Cologne; Centre for Economic Policy Research (CEPR)

Date Written: June 2007

Abstract

Given symmetric information, in a standard hold-up problem a buyer's investment incentives are always increasing in his bargaining power. While this result is robust under one-sided private information, it can be overturned under two-sided private information.

Keywords: hold-up problem, incomplete contracts, investment incentives

JEL Classification: D82, D86

Suggested Citation

Schmitz, Patrick W., Incomplete Contracts, the Hold-Up Problem and Asymmetric Information (June 2007). CEPR Discussion Paper No. DP6322. Available at SSRN: https://ssrn.com/abstract=1136648

Patrick W. Schmitz (Contact Author)

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

HOME PAGE: http://schmitz.uni-koeln.de/index.php?s=mitarbeiter&t=schmitz

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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