The holdup problem plays a central role in explaining governance choices in general and project delivery system selection in particular. This problem arises because of the asymmetrical distribution of quasi-rents between two trading parties. To put this theoretical proposition to a direct test, this research first uses the Nash bargaining model to derive a hypothesis that links quasi-rent differences to the excess profit margin that the contractor can achieve in ex post negotiations, and then

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... llates a data set of 62 change-order cases to enable the hypothesis to be tested econometrically. The corroboration of the hypothesis lends empirical support to the core argument used in the analysis of construction holdup problems. This finding brings to the foreground the significance of recognizing that change orders might be attributed to the owner's strategic choice. Ignorance of this factor would bias the coefficient estimation in the empirical analysis of change orders. individual papers. This paper is part of the Journal of Construction Engineering and Management, © ASCE, ISSN 0733-9364/04015004 (8) / $25.00. © ASCE 04015004-1 J. Constr. Eng. Manage. J. Constr. Eng. Manage. Downloaded from ascelibrary.org by University College London on 04/17/15. Copyright ASCE. For personal use only; all rights reserved. © ASCE 04015004-2 J. Constr. Eng. Manage. J. Constr. Eng. Manage. Downloaded from ascelibrary.org by University College London on 04/17/15. Copyright ASCE. For personal use only; all rights reserved. © ASCE 04015004-4 J. Constr. Eng. Manage. J. Constr. Eng. Manage. Downloaded from ascelibrary.org by University College London on 04/17/15. Copyright ASCE. For personal use only; all rights reserved. © ASCE 04015004-8 J. Constr. Eng. Manage. J. Constr. Eng. Manage. Downloaded from ascelibrary.org by University College London on 04/17/15.