Abstract：Based on the holdup problem of ex ante specific investment transaction, this paper built up a transaction model between upstream and downstream firms. Applying the recent contract theory, the paper analyzed three transaction mode: ① market transaction, that the two firms ex post renegotiate surplus; ② contract transaction, a bilateral contract transaction mode; and ③ futures transaction, a multiside contract transaction mode. The result shows that the first two transaction modes cause upstream and downstream firms to under invest because the benefit from specific investment can not avoid being shared; and the third mode can transfer partial risk of specific investment to the third party, which makes the expectation revenue of upstream and downstream firms only depend on their respective investment. That is, upstream and downstream firms respectively sign up a contract with the third party, which is independent of natural states. Such a transaction mechanism can even eliminate inefficiency of en ante investment. It also is the reason that why the existence of futures market can make transaction between upstream and downstream firms more efficient.
