TITLE:
Residual Control Rights, Transferable Returns, and Their Implications for Ownership Structure
AUTHORS:
Meri Melkonyan
KEYWORDS:
Property Right; Incomplete Contract; Relationship Specific Investments
JOURNAL NAME:
Modern Economy,
Vol.4 No.5,
May
31,
2013
ABSTRACT:
The paper examines the consolidation
problem in a model characterized by non-contractible, relationship specific investments,
transferable and non-transferable payoffs, and ex post actions that are chosen
after the uncertainty in the model is realized. We determine the relationship
between the optimal ownership structure and the nature of the relationship
specific investments and ex post actions and the degree to which payoffs are
transferable with ownership.