We reconsider the hold-up problem under symmetric information when more than two parties form a 'supply chain'. The parties are assumed to renegotiate bilaterally and sequentially. Potential trade distortions then arise in addition to the usual investment problem. Following Edlin and...

"This paper considers optimal contracts in supply chains that consist of"<formula format="inline"><simplemath>"n"≥ 2</simplemath></formula>"firms and face a potential investment hold-up problem. We show that option contracts may solve the incentive problems. First, we provide case-study evidence for the use of option contracts in the semiconductor...

Economic theories explaining the existence of stable cartels are still rare. The paper offers a generalization of the D'Aspremont, Jacquemin, Gabszewicz and Weymark [1983] approach of stable cartels in a static "small world" framework taking into account that suppliers may differ with respect to...