Ownership, access, and sequential investment

Maxim Mai, Vladimir Smirnov, Andrew Wait

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


We extend the property-rights framework to allow for a separation of the ownership rights of access and veto and for sequential investment. Parties investing first do so before contracting is feasible. It is possible, however, that parties investing second can share (at least some of) their investment costs. Along with this cost-sharing effect, the incentive to invest is affected by a strategic effect generated by sequential investment. Together these effects can overturn some of the predictions of the property-rights literature. For example, the most inclusive ownership structure might not be optimal, even if all investments are complementary.

Original languageEnglish
Pages (from-to)203-231
Number of pages29
JournalCanadian Journal of Economics
Issue number1
Publication statusPublished - Feb 2014
Externally publishedYes

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