Discussion paper

DP9065 Public goods and the hold-up problem under asymmetric information

An agent can make an observable but non-contractible investment. A principal then offers to collaborate with the agent to provide a public good. Private information of the agent about his valuation may either decrease or increase his investment incentives, depending on whether he learns his type before or after the investment stage.

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Citation

Schmitz, P (2012), ‘DP9065 Public goods and the hold-up problem under asymmetric information‘, CEPR Discussion Paper No. 9065. CEPR Press, Paris & London. https://cepr.org/publications/dp9065