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Economica Coase Lecture Reference Points and the Theory of the Firm

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  • OLIVER HART

Abstract

I argue that it has been hard to make progress on Coase's theory of the firm agenda because of the difficulty of formalizing haggling costs. I propose an approach that tries to move things forward using the idea of aggrievement costs, and apply it to the question of whether a transaction should be placed inside a firm (in-house production) or in the market place (outsourcing). Copyright (c) The London School of Economics and Political Science 2008.

Suggested Citation

  • Oliver Hart, 2008. "Economica Coase Lecture Reference Points and the Theory of the Firm," Economica, London School of Economics and Political Science, vol. 75(299), pages 404-411, August.
  • Handle: RePEc:bla:econom:v:75:y:2008:i:299:p:404-411
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    Cited by:

    1. Christian Zehnder & Holger Herz & Jean-Philippe Bonardi, 2016. "A Productive Clash of Cultures: Injecting Economics into Leadership Research," CESifo Working Paper Series 6175, CESifo Group Munich.
    2. Aghion, Philippe & Dewatripont, Mathias & Legros, Patrick & Zingales, Luigi (ed.), 2016. "The Impact of Incomplete Contracts on Economics," OUP Catalogue, Oxford University Press, number 9780199826216.
    3. Schmitz, Patrick W., 2010. "Contractual solutions to hold-up problems with quality uncertainty and unobservable investments," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 807-816, September.
    4. Elizabeth Hoffman & Matthew L. Spitzer, 2011. "The Enduring Power of Coase," Journal of Law and Economics, University of Chicago Press, vol. 54(S4), pages 63-76.
    5. Hoppe, Eva I. & Schmitz, Patrick W., 2011. "Can contracts solve the hold-up problem? Experimental evidence," Games and Economic Behavior, Elsevier, vol. 73(1), pages 186-199, September.
    6. repec:bla:jecsur:v:31:y:2017:i:1:p:281-302 is not listed on IDEAS
    7. Faravelli, Marco & Kirchkamp, Oliver & Rainer, Helmut, 2013. "The effect of power imbalances on incentives to make non-contractible investments," European Economic Review, Elsevier, vol. 61(C), pages 169-185.
    8. Berde, Éva, 2013. "A fundamentális transzformáció és a referenciapont szerepe a hiányos szerződések elméletében
      [The role of basic transformation and reference point in the theory of incomplete contracts]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 865-885.
    9. Paul Walker, 2016. "Simple Models of a Human-Capital-Based Firm: a Reference Point Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(1), pages 219-247, March.
    10. Siegwart Lindenberg, 2013. "Cognition and governance: why inventices have to take a back seat," Chapters,in: Handbook of Economic Organization, chapter 3 Edward Elgar Publishing.
    11. Bohdan Kukharskyy, 2012. "Global Sourcing if Contracts are Reference Points," Working Papers 129, Bavarian Graduate Program in Economics (BGPE).
    12. Paul Walker, 2013. "The ‘Reference Point’ Approach To The Theory Of The Firm: An Introduction," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 670-695, September.

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