post-investment holdup
The example of the post-investment holdup is when the company was aware of my progress towards MBA, and immediately the director left I was a pointed as the interim director. Froeb (2018) elaborates that the post-investment hold up is because the position that was given for the interim was later abolished due to merger hence would result in the post-investment holdup. On the other hand, the financial injury comes into play since there was a set of the agreement for the financial gain for the worker it is no longer there. In this way, the employee is left with the decision of staying with the organization in another capacity in case available or become unemployed and seek a job elsewhere.
The sunk cost, in this case, is money paid as school fees by the employee. Since the employee was pursuing an MBA, he or she paid fees so that he can complete the course. According to Hoppe & Schmitz (2011), Sun cost cannot be recovered, and, in this case, the employee cannot be able to recover the fees he paid while pursuing an MBA.
The contract, in this case, was that once the position for a director for customer services has been advertised, the employee was to apply for it immediately he or she completed his MBA. Which eventually did not occur since another company acquired the organization. In this way, they are leading to a breach of contract. Therefore, the damages, in this case, was that the employee lost his position, and the company did not honor its obligations.
Froeb, L. M. (2018). Managerial Economics, 5th Edition. [Strayer University Bookshelf]. Retrieved from https://strayer.vitalsource.com/#/books/9781337468015/
Hoppe, I & Schmitz, W. (2011). “Can contracts solve the holdup problem? Experimental evidence,”. Games and Economic Behavior. 73 (1): 186–199.