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
Date Written: July 19, 2017
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: Suggested Citation