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Destructing the hold-up

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  • Ng, Travis

Abstract

In an example of hold-up, giving the investing party the ability to destroy his relationship-specific investment can accommodate equilibria without under-investment. It suggests that destruction can be a possible incentive device in enhancing efficiency in bilateral relationships with hold-up.

Suggested Citation

  • Ng, Travis, 2011. "Destructing the hold-up," Economics Letters, Elsevier, vol. 111(3), pages 247-248, June.
    • Handle: RePEc:eee:ecolet:v:111:y:2011:i:3:p:247-248
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    References listed on IDEAS

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    1. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
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