Inside vs. Outside Ownership: A Political Theory of the Firm
AbstractIf contracting within the firm is incomplete, managers will expend resources on trying to appropriate a share of the surplus that is generated. We show that outside ownership may alleviate the deadweight losses associated with such costly distributional conflict, even if all it does is add another level of conflict. In case managers have to be provided with incentives to make firm-specific investments, there is a tradeoff between minimizing rent-seeking costs and maximizing output. This suggests, among other things, an explanation of why some firms areorganized as partnerships and others as stock corporations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0985.
Date of creation: 01 Aug 2000
Date of revision:
Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
Other versions of this item:
- Müller, Holger M. & Wärneryd, Karl, 1999. "Inside vs Outside Ownership - A Political Theory of the Firm," Sonderforschungsbereich 504 Publications 99-82, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Müller, Holger M. & Wärneryd, Karl, 1999. "Inside vs Outside Ownership: A Political Theory of the Firm," Working Paper Series in Economics and Finance 344, Stockholm School of Economics.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Inderst, Roman & Mueller, Holger M & Wärneryd, Karl, 2002.
"Distributional Conflict in Organisations,"
CEPR Discussion Papers
3315, C.E.P.R. Discussion Papers.
- Stergios Skaperdas, 2003.
"Restraining the Genuine Homo Economicus: Why the Economy Cannot Be Divorced from Its Governance,"
Economics and Politics,
Wiley Blackwell, vol. 15(2), pages 135-162, 07.
- Stergios Skaperdas, 2003. "Restraining the Genuine Homo Economicus: Why the Economy Cannot be Divorced from its Governance," CESifo Working Paper Series 901, CESifo Group Munich.
- Skaperdas, Stergios, 2003. "Restraining the genuine homo economicus: why the economy cannot be divorced from its governance," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-03, Social Science Research Center Berlin (WZB).
- Kolesnik, Georgiy, 2010.
"Математическая Модель Экономической Системы С Распределенными Правами Собственности
[A Mathematical Model of the Economic," MPRA Paper 47680, University Library of Munich, Germany, revised 25 May 2010.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.