Holdup and innovation

This paper examines the incentive to oppose innovation (or to delay agreement) when: there are multiple periods; previous outcomes affect the subsequent distribution of surplus; contracts are incomplete; and the parties are wealth constrained. Current agreements affect the parties, claim on future surplus either by altering their default payoffs (historical bargaining/contractual positions) or by changing their relative contemporaneous bargaining strengths. Delay will occur at different times depending on which assumption applies.