Costly coasian contracts

Luca Anderlini and Leonardo Felli

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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)
JEL-codes: C70 D23 D80 (search for similar items in EconPapers)
Pages: 56 pages
Date: 1998-10
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Citations: View citations in EconPapers (2)

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http://eprints.lse.ac.uk/3583/ Open access version. (application/pdf)

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:ehl:lserod:3583

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