Universität zu Köln

Schmitz, Patrick W. (2012). The hold-up problem, innovations, and limited liability. Econ. Lett., 117 (3). S. 841 - 844. LAUSANNE: ELSEVIER SCIENCE SA. ISSN 0165-1765

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Abstract

An inventor can invest research effort to come up with an innovation. Once an innovation is made, a contract is negotiated and unobservable effort must be exerted to develop a product. In the absence of liability constraints, the inventor's investment incentives are increasing in his bargaining power. Yet, given limited liability, overinvestments may occur and the inventor's investment incentives may be decreasing in his bargaining power. (C) 2012 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Schmitz, Patrick W. UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-477440
DOI:	10.1016/j.econlet.2012.08.046
Journal or Publication Title:	Econ. Lett.
Volume:	117
Number:	3
Page Range:	S. 841 - 844
Date:	2012
Publisher:	ELSEVIER SCIENCE SA
Place of Publication:	LAUSANNE
ISSN:	0165-1765
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language INCOMPLETE CONTRACTS; TRANSACTION COSTS; PROPERTY-RIGHTS; INFORMATION Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/47744