Search Results - subject:"sunk costs"

Market thickness, sunk entry costs, firm heterogeneity and the outsourcing decision : empirical evidence of manufacturing firms in France

Jabbour, Liza (contributor) - 2008

in sixteen manufacturing industries. It emphasizes the impact of the presence of sunk costs related to outsourcing, the … monitoring, and to the enforcement of contracts. Because of the presence of these sunk costs, outsourcing is expected to be a …, McLaren (2000) and Grossman and Helpman (2002) for example, such as the presence of sunk costs related to outsourcing, the …

Persistent link: https://www.econbiz.de/10003740231

Monopoly power and endogenous product variety : distortions and remedies

Bilbiie, Florin Ovidiu; Ghironi, Fabio; Melitz, Marc J. - 2008

Persistent link: https://www.econbiz.de/10003763480

Strategic investment in international gas-transport systems : a dynamic analysis of the hold-up problem

Hubert, Franz (contributor); Suleymanova, Irina (contributor) - 2008

We develop a dynamic model of strategic investment in a transnational pipeline system. In the absence of international contract enforcement, countries may distort investment in order to increase their bargaining power, resulting in overinvestment in expensive and underinvestment in cheap...

Persistent link: https://www.econbiz.de/10003793068

Venture capital exit rights

Bienz, Carsten; Walz, Uwe - 2008

Theorists argue that exit rights can mitigate hold-up problems in venture capital. Using a hand-collected data-set of venture capital contracts from Germany we show that exit rights are included more frequently in venture capital contracts when a hold-up problem associated with the venture...

Persistent link: https://www.econbiz.de/10003864098

Cumulative innovation, experimentation and the hold-up problem

Pollock, Rufus - 2008

Persistent link: https://www.econbiz.de/10003850879

Participation costs for responders can reduce rejection rates in ultimatum bargaining

Wichardt, Philipp C.; Schunk, Daniel; Schmitz, Patrick W. - 2008

Persistent link: https://www.econbiz.de/10003873723

Financial constraints as a barrier to export participation

Bellone, Flora; Musso, Patrick; Nesta, Lionel; Schiavo, … - 2008

export markets and expand their activities abroad. Keywords: Export; Firm heterogeneity; Financial constraint; Sunk costs JEL … assumption that entry into foreign markets involves large sunk costs is supported by an expanding empirical literature (see, amon … and Jensen (2004) for the US. Das et al. (2001) go one step further and estimates a structural model to quantify sunk …

Persistent link: https://www.econbiz.de/10003800276

Legal Competition, Political Process and Irreversible Investment Decisions

Deffains, Bruno - 2008

We compare the effects of competition for the design of labor laws in an environment characterized by irreversible investments in human and physical capital. We compare autarky with a two-country cases, assuming that capital is mobile and labor immobile. We distinguish two cases. In the first,...

Persistent link: https://www.econbiz.de/10012725361

Is Protecting Sunk Investment by Consumers a Key Rationale for Natural Monopoly Regulation?

Biggar, Darryl R. - 2008

Why regulate natural monopolies? Conventional economic theory points to the price-marginal cost margin and the ensuing deadweight loss. But this hypothesis does a poor job of explaining the way that regulators behave in practice. In particular, regulators have tended to eschew forms of price...

Persistent link: https://www.econbiz.de/10012725767

Does Competition Solve the Hold-Up Problem?

Felli, Leonardo - 2008

In an environment in which both buyers and sellers can undertake match specific investments, the presence of market competition for matches may solve hold-up and coordination problems generated by the absence of complete contingent contracts. In particular, this paper shows that when matching is...

Persistent link: https://www.econbiz.de/10012771138