Hold-up Problem

  title={Hold-up Problem},
    Holdup arises when part of the return on an agent's relationship-specific investments is ex post expropriable by his trading partner. The holdup problem has played an important role as a foundation of modern contract and organization theory, as the associated inefficiencies have justified many prominent organizational and contractual practices. We formally describe the main inefficiency hypothesis and sketch out the remedies suggested, as well as the more recent re-examination of the relevance… CONTINUE READING