|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CEE | CEP | FMG | SERC | STICERD||Cookies?|
Paper No' TE/1998/362: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: Ex-ante contractual costs; hold-up problem; Coase theorem; contracts over contracts; incomplete contracts.
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: Theoretical Economics
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:We identify and investigate the basic 'hold-up problem' which arises whenever each party to a contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plausible circumstances, a 'contractual solution' to this hold-up problem is not available. This is because a contractual solution to the hold-up problem typically entails writing a 'contract over a contract' which generates a fresh set of ex-ante costs, and hence is associated with a new hold-up problem.
Copyright © STICERD & LSE 2005 - 2014 | LSE, Houghton Street, London WC2A 2AE | Tel: +44(0)20 7955 6699 | Email: email@example.com | Site updated 21 August 2014