Hold-up:
A) is a hazard associated with relationship-specific exchange.
B) mitigates worker shirking.
C) makes spot exchange efficient.
D) solves the principal-agent problem.

Question

Quizplus · Accepted Answer

Hold-up refers to the risk associated with relationship-specific exchange, where one party may be vulnerable to exploitation or opportunism from the other party due to the significant investment made in the relationship. This hazard can lead to inefficient outcomes or even break down of the exchange. None of the other options adequately capture the concept of hold-up.

Hold-Up