Incomplete contracts and competition: another look at fisher body/general motors?

Antonio Nicita () and Simone Sepe

European Journal of Law and Economics, 2012, vol. 34, issue 3, 495-514

Abstract: In this paper we analyze the problem of the enforcement of incomplete contracts with endogenous outside options. Some of the equilibria we outline may reverse one of the main results presented in the standard literature. We then revisit the literature on the highly debated Fisher Body/General Motors merger and suggest an explanation based on GM’s need to control the Fisher brothers’ outside options. Copyright Springer Science+Business Media, LLC 2012

Keywords: Incomplete contracts; Hold-up problem; Transaction costs; Endogenous outside options; Cross competition; Vertical integration; D23; L12; L14; L21; L22; L42 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s10657-010-9166-y

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