Bester, Helmut - In: Journal of Mathematical Economics 49 (2013) 4, pp. 302-311
investments at the market entry stage. Investment incentives depend on search frictions because both parties in a match are … partially locked-in when they bargain over the joint surplus from their sunk investments. The associated holdup problem is more … important for the long side of the market. In the extreme case of perfectly substitutable investments only the agents on the …