Arbeitspapier
Price-setting Power versus Private Information
This paper investigates the extent of the holdup underinvestment problem in a buyer-seller relationship in which the seller has private information about his alternative trading opportunities. Theory predicts that, compared with a situation in which outside options are publicly observed, the seller obtains an informational rent while the buyer bears an informational loss. As a result the seller is predicted to invest more while the buyer is expected to invest less. In contrast to these predictions, private information appears to have no impact on the investment levels observed in the experiment. A second main finding is that investments do increase with the price-setting power of the investor. Overall the results question some recent theoretical suggestions that private information rents might substitute for price-setting power in mitigating holdup.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tinbergen Institute Discussion Paper ; No. 03-099/1
- Klassifikation
-
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Transactional Relationships; Contracts and Reputation; Networks
Design of Experiments: Laboratory, Individual
- Thema
-
holdup
private information
outside options
experiments
Asymmetrische Information
Investition
Investitionsrisiko
Preis
Marktmacht
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Sloof, Randolph
- Ereignis
-
Veröffentlichung
- (wer)
-
Tinbergen Institute
- (wo)
-
Amsterdam and Rotterdam
- (wann)
-
2003
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Sloof, Randolph
- Tinbergen Institute
Entstanden
- 2003
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