The risk of holdup refers to the chance of being taken advantage of by a trading partner after the investment in specialized assets has been made.

Question

Quizplus · Accepted Answer

This is the correct definition of the risk of holdup. It occurs when one party invests in specific assets for a transaction and then the other party takes advantage of that investment to renegotiate the terms of the agreement, resulting in losses for the investing party.

The Risk of Holdup Refers to the Chance of Being