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Rigidity in bilateral trade with holdup

Zhao, Rui R. - In: Theoretical economics : TE ; an open access journal in … 3 (2008) 1, pp. 85-121

This paper studies bilateral trade in which the seller makes a hidden investment that influences the buyer's hidden valuation. In general it is impossible to implement both first-best efficient trade and efficient investment using budget-balanced trading mechanisms. The paper fully characterizes...

Persistent link: https://www.econbiz.de/10011700620

Rigidity in bilateral trade with holdup

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Rigidity in bilateral trade with holdup

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All-or-nothing monitoring

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