Asset Ownership and Contractability of Interaction

Andreas Roider

No 12/2002, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: In a property-rights framework, I study how organizational form and quantity contracts interact in generating investment incentives. The model nests standard property-rights and hold-up models as special cases. I admit general message-dependent contracts, but provide conditions under which non-contingent contracts are optimal. First, I contribute to the foundation of the property-rights theory: I characterize under which circumstances its predictions are correct when trade is contractible. Second, I study how the optimal use of the incentive instruments depends on the environment. This is in the spirit of the multitasking literature. Finally, the model produces implications of the property-rights theory that are empirically testable.

Keywords: Property Rights; Incomplete Contracts; Specific Investments (search for similar items in EconPapers)
JEL-codes: D23 D82 L14 L22 (search for similar items in EconPapers)
Date: 2002
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Related works:
Journal Article: Asset Ownership and Contractibility of Interaction (2004)
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