The hold-up problem with flexible unobservable investments

• 成果类型: Article
• 署名作者: Krahmer, Daniel
• 署名单位: University of Bonn
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2026.106205
• 发表日期: 2026
• 关键词: Moral hazard; INFORMATION; CONTRACTS

摘要

The paper studies the canonical hold-up problem with one-sided investment by the buyer and full bargaining power by the seller. The buyer can covertly choose any distribution of valuations at a cost and privately observes her valuation. I show that, unlike in the well-understood case with linear costs, if investment costs are strictly convex, the buyer's equilibrium utility is strictly positive and total welfare is strictly higher than when valuations are public information, thus alleviating the severity of the hold-up problem. In fact, when costs are mean-based or display decreasing risk, the equilibrium outcome might be efficient.