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Strategic Capacity Investment under Holdup Threats: The Role of Contract Length and Width

dc.contributor.authorVilleneuve, Bertrand
HAL ID: 745441
ORCID: 0000-0001-7485-9262
dc.contributor.authorDurand-Viel, Laure
dc.date.accessioned2010-01-11T10:18:29Z
dc.date.available2010-01-11T10:18:29Z
dc.date.issued2011
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/2859
dc.language.isoenen
dc.subjectLong-term contractsen
dc.subjectIncomplete contractingen
dc.subjectInfrastructure investmenten
dc.subject.ddc338.5en
dc.subject.classificationjelD42en
dc.subject.classificationjelD45en
dc.subject.classificationjelD92en
dc.subject.classificationjelL95en
dc.titleStrategic Capacity Investment under Holdup Threats: The Role of Contract Length and Widthen
dc.typeDocument de travail / Working paper
dc.description.abstractenThis article analyzes the impact of the length of incomplete contracts on investment and surplus sharing. In the bilateral relationship explored, the seller controls the input and the buyer invests. With two-part tariffs, the length of the contract is irrelevant: surplus is maximal and goes all to the seller. If total surplus is targeted, or if sellers are left free, contracts will be as short as possible. If regulators want to favor buyers, prohibibiting nonlinear pricing and forcing long contracts are the best solutions. The interaction of a restriction (width) with another (length) is explained in detail.en
dc.publisher.nameUniversité Paris-Dauphine
dc.publisher.cityParis
dc.identifier.citationpages23en
dc.description.sponsorshipprivateouien
dc.subject.ddclabelMicroéconomieen


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