This Paper examines the restructuring of state assets in markets deregulated by privatizations and investment liberalizations. We show that a net revenue maximizing government has a stronger incentive to restructure than a profit maximizing acquiring firm: A restructuring firm only takes into...

I adopt a non-cooperative game theoretic approach to an incomplete contracting transaction model, a la Grossman & Hart (1986), Hart & Moore (1990) and Bolton & Whinston (1993), consisting of one upstream firm and two downstream firms. When the downstream firms need to make relation-specific...