Holdups and holdouts: What do they have in common?

The holdup and holdout problems arise in different contexts, but they share certain fundamental similarities that have not generally been recognized. This paper characterizes the commonalties between the two problems and their remedies. ► The holdup and holdout problems are often confused. ► Holdups...

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Bibliographic Details
Published in:	Economics letters Vol. 117; no. 1; pp. 330 - 333
Main Authors:	Miceli, Thomas J., Segerson, Kathleen
Format:	Journal Article
Language:	English
Published:	Amsterdam Elsevier B.V 01-10-2012 Elsevier Science Ltd
Subjects:	Bargaining Bonds Economic models Eminent domain Exchange Holdout problem Holdup problem Investment Mathematical problems Non-salvageable investments Problem solving Studies Eminent domain Holdup problem D23 Holdout problem Non-salvageable investments K11 L23 L14
Online Access:	Get full text
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Summary:	The holdup and holdout problems arise in different contexts, but they share certain fundamental similarities that have not generally been recognized. This paper characterizes the commonalties between the two problems and their remedies. ► The holdup and holdout problems are often confused. ► Holdups usually arise in contract settings where one party makes a transaction-specific investment prior to trade. ► Holdouts arise in the case of land assembly for large scale development projects. ► This paper uses a simple model to reveal the commonalities between the two problems.
Bibliography:	ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23
ISSN:	0165-1765 1873-7374
DOI:	10.1016/j.econlet.2012.05.036