Renegotiation Design and Contract Solutions to the Hold‐Up Problem

M'hand Fares

Journal of Economic Surveys, 2006, vol. 20, issue 5, 731-756

Abstract: Abstract This paper surveys the literature on contractual solutions to the hold‐up problem which has addressed the issue of how to design the optimal contractual arrangement to achieve efficient investments in the presence of contract incompleteness. Although scholars have argued that renegotiation design is a necessary condition to avoid the hold‐up problem, some recent papers have seriously questioned this condition. We mainly show that renegotiation design remains a necessary condition to implement efficient investments.

Date: 2006
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https://doi.org/10.1111/j.1467-6419.2006.00266.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jecsur:v:20:y:2006:i:5:p:731-756

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