Incomplete Contracts, the Hold-Up Problem and Asymmetric Information
15 Pages Posted: 23 May 2008
Date Written: June 2007
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: Suggested Citation