Asked by Austin Parker on Jun 30, 2024
Verified
Firms that anticipate hold-up,choose organizational or contractual forms
A) that give both parties the incentive to make relationship-specific investments
B) that give both parties the incentive to exploit each other's positions
C) that gives both parties an incentive to trade,even after the relationship-specific investments have been made
D) Both A&C
Relationship-Specific Investments
See Specific investments.
Organizational
Pertaining to the structure and function of an organization, including its processes, policies, and personnel management.
Contractual Forms
denotes the various arrangements and agreements under which businesses and individuals engage in transactions, outlining the terms and conditions of their exchanges.
- Acquire knowledge of hold-up problems in commerce and their solutions, and apply this knowledge in operational contexts.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
D
Explanation :
Firms anticipating hold-up issues often choose organizational or contractual forms that incentivize both parties to make relationship-specific investments and continue trading even after these investments have been made, to ensure mutual benefit and reduce the risk of exploitation.
Learning Objectives
- Acquire knowledge of hold-up problems in commerce and their solutions, and apply this knowledge in operational contexts.