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Discussion Paper Details

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Title: Incomplete Contracts, the Hold-Up Problem and Asymmetric Information

Author(s): Patrick W. Schmitz

Publication Date: June 2007

Keyword(s): hold-up problem, incomplete contracts and investment incentives

Programme Area(s): Industrial Organization

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.

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Bibliographic Reference

Schmitz, P. 2007. 'Incomplete Contracts, the Hold-Up Problem and Asymmetric Information'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6322