Markets Can Solve the Hold-Up Problem.

Some regulatory programs are effective only if firms make some irreversible investments which reduce the cost of compliance. A firm potentially subject to regulation may therefore behave strategically - not investing and thus forcing the regulator to void the proposed regulation. We show that such incentives, which resemble a hold-up problem, may not be overcome when government's only tool is the imposition of an emissions tax.

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Year of publication:	1996
Authors:	Gersbach, H. ; Glazer, A.
Institutions:	California Irvine - School of Social Sciences
Subject:	INVESTMENTS \| TAXATION \| CORPORATIONS \| GOVERNMENT POLICY

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Series:	California Irvine - School of Social Sciences.
Type of publication:	Book / Working Paper
Notes:	13 pages
Classification:	D20 - Production and Organizations. General ; D21 - Firm Behavior ; D29 - Production and Organizations. Other
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005486836