Costly Coasian Contracts

Luca Anderlini and Leonardo Felli

STICERD - Theoretical Economics Paper Series from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: We identify and investigate the basic 'hold-up problem' which arises whenever each party to a contract has to pay some ex-ante cost for the contract to become feasible. We then proceed to show that, under plausible circumstances, a 'contractual solution' to this hold-up problem is not available. This is because a contractual solution to the hold-up problem typically entails writing a 'contract over a contract' which generates a fresh set of ex-ante costs, and hence is associated with a new hold-up problem.

Keywords: Ex-ante contractual costs; hold-up problem; Coase theorem; contracts over contracts; incomplete contracts. (search for similar items in EconPapers)
Date: 1998-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Costly coasian contracts (1998)
Working Paper: Costly Coasian Contracts (1997)
Working Paper: Costly Coasian Contracts (1997)
Working Paper: Costly Coasian Contracts
Working Paper: Costly Coasian Contracts'
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Persistent link: https://EconPapers.repec.org/RePEc:cep:stitep:362

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