Investing in a relationship

• 成果类型: Article
• 署名作者: Halac, Marina
• 署名单位: Columbia University; University of Warwick
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12080
• 发表日期: 2015
• 页码: 165-185
• 关键词: Repeated games; CONTRACTS; integration; INFORMATION; INVESTMENT; reputation

摘要

A principal can make an investment anticipating a repeated relationship with an agent, but the agent may appropriate the returns through ex post bargaining. I study how this holdup problem and efficiency depend on the contracting environment. When investment returns are observable, informal contracts ex post can be more efficient than formal contracts, as they induce higher investment ex ante: the principal invests not only to generate direct returns, but also to improve relational incentives. Unobservability of returns increases the principal's ability to appropriate the returns but reduces her ability to improve incentives. The optimal information structure depends on bargaining power.