A simple economic teaching experiment on the hold-up problem

Dieter Balkenborg; Todd Kaplan; Timothy Miller

doi:10.1080/00220485.2012.714310

A simple economic teaching experiment on the hold-up problem

Dieter Balkenborg, Todd Kaplan, Timothy Miller

Research output: Contribution to journal › Article › peer-review

Abstract

The hold-up problem is central to the theory of incomplete contracts. This can occur if, after making a sunk investment in a relationship, one party can be taken advantage of by the other party, leading to inefficient underinvestment. The authors describe a simple teaching experiment that illustrates the hold-up problem, and address how to integrate it into a class.

Original language	English
Pages (from-to)	377-385
Number of pages	9
Journal	Journal of Economic Education
Volume	43
Issue number	4
DOIs	https://doi.org/10.1080/00220485.2012.714310
State	Published - 1 Oct 2012
Externally published	Yes

Keywords

classroom experiments
hold-up problem
subgame perfection

ASJC Scopus subject areas

Education
Economics and Econometrics

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10.1080/00220485.2012.714310

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A simple economic teaching experiment on the hold-up problem

Abstract

Keywords

ASJC Scopus subject areas

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