Contractual signaling, relationship-specific investment and exclusive agreements

B-Tier
Journal: Games and Economic Behavior
Year: 2014
Volume: 87
Issue: C
Pages: 19-33

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

I analyze a model of hold-up with asymmetric information at the contracting stage. The asymmetry of information concerns the value of trade with external parties. I show that contractual signaling and efficiency of investment can conflict if only quantity is contractible. This conflict generates inefficient equilibria in terms of investment. Contracting on exclusivity in addition to quantity resolves the conflict and consequently eliminates the inefficiency of investment.

Technical Details

RePEc Handle
repec:eee:gamebe:v:87:y:2014:i:c:p:19-33
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29