Definition of The Hold-Up Problem / Hold-Up Problems: The hold-up problem is one of a certain class of contracting problems.

Imagine a situation where there is profit to be made if agents A and B work together, so they consider an agreement to do so after A buys the necessary equipment. The hold-up problem (in this context) is A might not be willing to take that agreement, even though the outcome would be Pareto efficient, because after A has made that investment, B would have the power might decide to demand a larger share of the profits than before, since A is now deeply invested in the project but B is not, so B has some bargaining power that wasn't there before the investment. B could demand all of the profits, in fact, since A's alternative is to lose the investment entirely.

Other hold-up problems are analogous to this one. (Econterms)

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