If Bratty Brenda decides to hit Tattling Tina, what would Tattling Tina's best response be
a. Tell
b. Not tell
c. Run
d. Hide
QUESTION 2Firms that anticipate hold-up, choose organizational or contractual forms
a. that give both parties the incentive to make relationship-specific investments
b. that give both parties the incentive to exploit each other's positions
c. that gives both parties an incentive to trade, even after the relationship-specific investments have been made
d. Both A&C
QUESTION 3If Mousey Mike threatens to tell, what would Bratty Brad's best response be?
a. Hit
b. Not hit
c. Run
d. Hide
QUESTION 4If a firm anticipates that it is at a risk of being held up, it is more likely to
a. forgo the transaction completely
b. merge with its trading partner
c. exchange hostages
d. All the above
QUESTION 5If Mousey Mike wants to not be hit, what strategy could he follow
a. Threaten to not tell
b. Always not tell
c. Threaten to tell
d. All of the above
QUESTION 6What are some of the solutions for a hold-up problem?
a. Mergers
b. Contracts
c. Exchange of hostages'
d. All the above
QUESTION 7What would be the Nash equilibrium of this simultaneous game?
a. Hit, Tell
b. Not hit, Tell
c. Hit, Not tell
d. Both B&C
QUESTION 8Hold-up problems usually occur when
a. One of the parties makes a heavy investment in equipment specific to its trading partner
b. One of the firms decides to invest heavily in general purpose equipment
c. Costs are avoidable
d. Costs are incurred
QUESTION 9If Mousey Mike does not tattle, what would Bratty Brad's best response be
a. Hit
b. Not hit
c. Run
d. Hide
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