NettetIn economics, the hold-up problem is a situation where two parties (such as a supplier and a manufacturer or the owner of capital and workers) may be able to work most … NettetLecture Note 3: Hold-Up (May Be Your Friend) marginal rather than average cost. Consequently, the parties signed a contract that gave Fisher certain protections, including a formula specifying the price as a mark-up of Fisher’s variable costs. But this contract created ways for Fisher to hold-up GM, such as

Information and the Hold-Up Problem - JSTOR

In economics, the hold-up problem is central to the theory of incomplete contracts, and shows the difficulty in writing complete contracts. A hold-up problem arises when two factors are present: Parties to a future transaction must make noncontractible relationship-specific investments before the … Se mer It is often argued that the possibility of a hold-up can lead to underinvestment in relation-specific investment and thus inefficiency. Underinvestment occurs because investors cannot guarantee themselves a … Se mer Auto Industry A historic example concerns the US car industry, but the example is sharply disputed by Coase (2000). Fisher Body had an exclusive contract with General Motors (GM) to supply car body parts and so Fisher Body was the … Se mer • Specific asset • Vertical monopoly • Game theory Se mer In a scenario where two risk-neutral parties S (supplier) and B (Buyer) can make profit by working together, it is efficient to work together as long as the buyers' valuation exceeds the sellers' costs (Schmitz, 2001). When the two parties could agree … Se mer Contractual Rogerson (1992) showed the existence of a first-best contractual solution to the hold-up problem in even extremely complex environments involving x agents with arbitrarily complex transaction decisions and utility functions. … Se mer Nettetto a hold-up problem but, when competition is at its peak, there is a unique equilibrium of the competition game with efficient matches – no coordination failures – and the … lhip 2022

Holdup Problem, Airline Edition - Truth on the Market

NettetThe hold-up problem is a central issue in economic analysis.1 It arises when one party makes a sunk, relationship-specific investment and then engages in bargaining with … NettetThe hold-up problem is central to the theory of incomplete contracts. It shows how the difficulty in writing complete contracts and the resulting need to renegotiate can lead to … mcdp2800 megachips