European Journal of Law and Economics

, Volume 34, Issue 3, pp 495-514

First online:

Incomplete contracts and competition: another look at fisher body/general motors?

  • Antonio NicitaAffiliated withDepartment of Economics, University Of Siena Email author 
  • , Simone M. SepeAffiliated withUniversity of Arizona, James E. Rogers College of Law

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In this paper we analyze the problem of the enforcement of incomplete contracts with endogenous outside options. Some of the equilibria we outline may reverse one of the main results presented in the standard literature. We then revisit the literature on the highly debated Fisher Body/General Motors merger and suggest an explanation based on GM’s need to control the Fisher brothers’ outside options.


Incomplete contracts Hold-up problem Transaction costs Endogenous outside options Cross competition Vertical integration

JEL Classification

D23 L12 L14 L21 L22 L42