Appropriability, Investment Incentives and the Property Rights Theory of the Firm
AbstractThis paper examines the property rights theory of the firm when a manager's relationship-specific investment can be partially appropriated by the owner of an asset when cooperation breaks down. For example ownership typically confers the right to continue with a project even should the production team dissolve. The investments of non-owners may then be devalued, but are seldom wholly loss to the owner. With such spillovers, the outside-option principle can be incorporated into the Grossman-Hart-Moore framework without implying that ownership demotivates. Enriched predictions on the determinants of integration emerge.
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Bibliographic InfoPaper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 03/068.
Length: 27 pages
Date of creation: Apr 2003
Date of revision:
theory of the firm;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-03 (All new papers)
- NEP-LAB-2003-11-03 (Labour Economics)
- NEP-MFD-2003-11-03 (Microfinance)
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- Maija Halonen-Akatwijuka & Toby Regner, 2004.
"Digital Technology and the Allocation of Ownership in the Music Industry,"
The Centre for Market and Public Organisation
04/096, Department of Economics, University of Bristol, UK.
- Maija Halonen-Akatwijuka & Tobias Regner, 2009. "Digital Technology and the Allocation of Ownership in the Music Industry," The Centre for Market and Public Organisation 09/228, Department of Economics, University of Bristol, UK.
- Tobias Regner & Maija Halonen-Akatwijuka, 2004. "Digital Technology And The Allocation Of Ownership In The Music Industry," Royal Economic Society Annual Conference 2004 54, Royal Economic Society.
- Maija Halonen-Akatwijuka & Tobias Regner, 2009. "Digital Technology and the Allocation of Ownership in the Music Industry," Jena Economic Research Papers 2009-096, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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