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What is holdup?
This relates to a so called game or action that takes place between an ultimatum games. In this case, the decision of responders is considered extremely crucial as they have the right to decline or accept the shares offered by proposer. Here the action relates to exerted effort to change the pie size from small to big.
Holdup game and holdup problem
One of the main issues related to this holdup game is based on the investments that take place between partners in trade. This issue was one of the key factors which brought its role in the light. Holdup problem is considered one the reasons for the existence of organisation theory and modern contract. This problem also high light show both parties can work with ease but hold back in fear of giving more power to the other party.
Factors which help the problems to rise
There are m mainly 2factors that that creates issues in holdup game. They are:
- Deductions related to optimal transaction (of a particular form) is not possible before completion of transaction The transaction types can be related to:
- Unit quantity
- Delivery time
- Specifications related to quality level
- Prior to transaction of particular investments (related to relationship), it is a mandatory factor for both the parties to prepare a non-contractible agreement. This is basically focused on future transactions.
We have explained both of them in our holdup game assignment help manual with a number of examples.
Why contract formation becomes difficult for holdup game?
In our holdup game homework help manual you will find that trade can be an efficient result due to voluntary bargaining. Nevertheless, there are 4aspects that stand as an obstacle to contract formation. Those reasons are as follows:
- Asymmetric information
- Quality glitches
- Lack of trust
- Unanticipated external factors
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