Ex Post Destruction in the Hold-up Problem

We investigate whether or not ex post destruction can solve the hold-up problem. After clarifying the difference between ex post destruction and nontrade when negotiation breaks down, we show that the option of ex post destruction is not sufficient to enhance ex ante efficiency. In particular, only...

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Main Authors:	WANG, Huan, ZHANG, Juyuan, ZHANG, Yi
Format:	text
Language:	English
Published:	Institutional Knowledge at Singapore Management University 2013
Subjects:	Destruction Hold-up Underinvestment Incomplete Information Behavioral Economics Finance
Online Access:	https://ink.library.smu.edu.sg/soe_research/1487 https://ink.library.smu.edu.sg/context/soe_research/article/2486/viewcontent/Holdup_destruction.pdf
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Institution:	Singapore Management University
Language:	English

id	sg-smu-ink.soe_research-2486
record_format	dspace
spelling	sg-smu-ink.soe_research-24862019-05-20T15:38:01Z Ex Post Destruction in the Hold-up Problem WANG, Huan ZHANG, Juyuan ZHANG, Yi We investigate whether or not ex post destruction can solve the hold-up problem. After clarifying the difference between ex post destruction and nontrade when negotiation breaks down, we show that the option of ex post destruction is not sufficient to enhance ex ante efficiency. In particular, only if the information about the spitefulness of the supplier is coarse enough, will the option of ex post destruction alleviate the inefficiency of underinvestment caused by the hold-up problem. 2013-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/1487 https://ink.library.smu.edu.sg/context/soe_research/article/2486/viewcontent/Holdup_destruction.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University Destruction Hold-up Underinvestment Incomplete Information Behavioral Economics Finance
institution	Singapore Management University
building	SMU Libraries
continent	Asia
country	Singapore Singapore
content_provider	SMU Libraries
collection	InK@SMU
language	English
topic	Destruction Hold-up Underinvestment Incomplete Information Behavioral Economics Finance
spellingShingle	Destruction Hold-up Underinvestment Incomplete Information Behavioral Economics Finance WANG, Huan ZHANG, Juyuan ZHANG, Yi Ex Post Destruction in the Hold-up Problem
description	We investigate whether or not ex post destruction can solve the hold-up problem. After clarifying the difference between ex post destruction and nontrade when negotiation breaks down, we show that the option of ex post destruction is not sufficient to enhance ex ante efficiency. In particular, only if the information about the spitefulness of the supplier is coarse enough, will the option of ex post destruction alleviate the inefficiency of underinvestment caused by the hold-up problem.
format	text
author	WANG, Huan ZHANG, Juyuan ZHANG, Yi
author_facet	WANG, Huan ZHANG, Juyuan ZHANG, Yi
author_sort	WANG, Huan
title	Ex Post Destruction in the Hold-up Problem
title_short	Ex Post Destruction in the Hold-up Problem
title_full	Ex Post Destruction in the Hold-up Problem
title_fullStr	Ex Post Destruction in the Hold-up Problem
title_full_unstemmed	Ex Post Destruction in the Hold-up Problem
title_sort	ex post destruction in the hold-up problem
publisher	Institutional Knowledge at Singapore Management University
publishDate	2013
url	https://ink.library.smu.edu.sg/soe_research/1487 https://ink.library.smu.edu.sg/context/soe_research/article/2486/viewcontent/Holdup_destruction.pdf
_version_	1770571473692393472

Ex Post Destruction in the Hold-up Problem

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