Transaction-Specific Investments and Organizational Choice: A Coase-to-Coase Theory
AbstractThis paper examines markets, firms, and the law as alternative institutional arrangements for organizing transactions that involve transaction-specific investments and uncertain performance. The analysis is the logical extension of Coase’s seminal analysis of the market-firm boundary on one hand, and the market-law boundary on the other. It thus combines insights from the literature on industrial organization and law and economics. The result is a unified framework that reveals the relative advantages and disadvantages, within a fairly simple economic setting, of market exchange, court ordering (contracts), and internal governance (agency).
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2014-06.
Length: 26 pages
Date of creation: Mar 2014
Date of revision:
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More information through EDIRC
Asset specificity; contracts; firms; holdup problem; market exchange;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- 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-2014-04-11 (All new papers)
- NEP-BEC-2014-04-11 (Business Economics)
- NEP-COM-2014-04-11 (Industrial Competition)
- NEP-GER-2014-04-11 (German Papers)
- NEP-LAW-2014-04-11 (Law & Economics)
- NEP-MIC-2014-04-11 (Microeconomics)
- NEP-PKE-2014-04-11 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Mathias Dewatripont & Patrick Bolton, 2005.
ULB Institutional Repository
2013/9543, ULB -- Universite Libre de Bruxelles.
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"Holdups, Standard Breach Remedies, and Optimal Investment,"
NBER Working Papers
5007, National Bureau of Economic Research, Inc.
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"Property Rights and the Nature of the Firm,"
3448675, Harvard University Department of Economics.
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- Oliver Hart, 2011. "Thinking about the Firm: A Review of Daniel Spulber's The Theory of the Firm," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 101-13, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kasey Kniffin).
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