This paper studies investment incentives in the steady state of a dynamic bilateral matching market. Because of search … underinvestment on both sides of the market. But when market frictions become negligible, the equilibrium investment levels tend …

investment incentives. Our model nests standard property-rights and hold-up models as special cases. We admit general message … contracts. First, we contribute to the foundation of the property-rights theory by characterizing under which circumstances its … model has implications for future empirical test of the property-rights theory …