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|Title:||Ownership, access and sequential investment|
School of Economics
|Publisher:||School of Economics|
|Abstract:||We extend the property-rights framework to allow for: a separation of the ownership rights of access and veto; and sequential investment. Parties investing first (ex ante) do so before contracting is possible. Parties that invest second (ex post) can contract on (at least some) of their investment costs. Along with this cost-sharing effect, the incentive to invest is affected by a strategic effect generated by sequential investment. Together these effects can overturn some of the predictions of the property-rights literature. For example, the most inclusive ownership structure might not be optimal, even if all investments are complementary.|
|Department/Unit/Centre:||School of Economics|
|Type of Work:||Working Paper|
|Appears in Collections:||Working Papers - Economics|
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