Information Control in the Hold-Up Problem

Nguyen, Anh; Tan, Teck Yong

doi:10.2139/ssrn.3173662

Cited by 2 publications

(2 citation statements)

References 17 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Many researchers have studied the hold-up problem from different perspectives, with the majority focusing on the relationships among transaction costs, hold-up, and vertical integration (John & Weitz, 1988;Joskow, 1988;Levy, 1985;Maher, 1997;Monteverde & Teece, 1982). Another large strand of the literature has explored mechanisms for mitigating hold-ups, such as the use of long-term contracts (Joskow, 1985(Joskow, , 1987(Joskow, , 1990, open access (McCabe & Snyder, 2018), controlling the flow of information (Durand-Viel & Villeneuve, 2016;Gul, 2010;Nguyen & Tan, 2019), renegotiations (Aghion et al, 1994;Georg & Klaus, 1995), and adding more clauses to contracts (Iyer & Sautner, 2018).…”

Section: Introductionmentioning

confidence: 99%

The hold‐up problem in China's broiler industry: Empirical evidence from Jiangsu Province

Tang

Zheng

et al. 2021

Canadian J Agri Economics

View full text Add to dashboard Cite

Using detailed survey data on broiler growers, we tested for the existence of holdup problems in the broiler industry in Jiangsu Province, China. We found that growers' investments in chicken houses, which are assets with a high degree of physical and location specificity, increased along with the number of potential buyers (integrators) nearby. Such an effect was particularly strong in proximity to leading industry buyers. These results support the existence of hold-ups in the Chinese broiler industry. However, we failed to find evidence that a longer-term contract led to higher grower investments in chicken houses, possibly because of the lack of a minimum purchase guarantee in a typical contract. A key policy implication of this study is that subsidies to growers, from the government or buyers, can alleviate the underinvestment problem caused by hold-ups.

show abstract

Section: Introductionmentioning

confidence: 99%

The hold‐up problem in China's broiler industry: Empirical evidence from Jiangsu Province

Tang

Zheng

et al. 2021

Canadian J Agri Economics

View full text Add to dashboard Cite

show abstract

“…Next, the agent's experimentation in this paper can be viewed as an investment in a holdup problem, and the literature has noted that asymmetric information about the investment can potentially protect the investing party from being held up, thus restoring ex-ante investment incentives. Gul (2001), González (2004), Lau (2008), Hermalin (2013) and Nguyen and Tan (2019) make this point by studying deterministic investments; by contrast, the "investment" here is stochastic. Hermalin and Katz (2009) and Halac (2015) consider stochastic investments, but their models have no room for screening and have a different focus.…”

Section: Introductionmentioning

confidence: 99%

Knowledge as Property Rights Under the Ratchet Effect of Innovation

Tan

2019

Journal of the European Economic Association

Self Cite

View full text Add to dashboard Cite

This paper studies how reduced oversight creates an incentive for process innovation. With incomplete contracts, tight monitoring of workers creates a ratchet effect of innovation. Under reduced oversight, a worker accrues private knowledge about his innovation, which serves as a substitute for its inalienable property rights. The resulting asymmetric information generates an information rent for the worker, which feeds back as an innovation incentive ex ante. A weak early production incentive is required to complement it. Innovations are generally underutilized ex post, and mildly successful innovations are not distinguished from failed innovation attempts.

show abstract

Information Control in the Hold-Up Problem

Cited by 2 publications

References 17 publications

The hold‐up problem in China's broiler industry: Empirical evidence from Jiangsu Province

The hold‐up problem in China's broiler industry: Empirical evidence from Jiangsu Province

Knowledge as Property Rights Under the Ratchet Effect of Innovation

Contact Info

Product

Resources

About