Hold-up , Asset Ownership , and Reference Points

@inproceedings{Hart2007HoldupA,
  title={Hold-up , Asset Ownership , and Reference Points},
  author={Oliver Hart and John I. Moore and Mathias Dewatripont and Florian Englmaier and Rob Gertner and Louis Kaplow and Josh Lerner and Bentley MacLeod and Jeremy Stein and Georgy Egorov},
  year={2007}
}
We study two parties who desire a smooth trading relationship under conditions of value and cost uncertainty. A rigid contract fixing price works well in normal times since there is nothing to argue about. However, when value or cost is exceptional, one party will hold up the the other , damaging the relationship and causing deadweight losses as parties… CONTINUE READING