IDEAS home Printed from
   My bibliography  Save this article

The Law of One Price and a Theory of the Firm


  • Shailendra Raj Mehta


I use a hierarchical perspective to explain the pattern of interindustry wages and capital intensities. Industries that have more productive technologies pay more than less-productive ones, and are more capital intensive as well. Results on size of the hierarchy, effort levels, and span of control are presented as well. The key insight is that supervisors both monitor and coordinate their subordinates, and time spent on one of these activities reduces the time available for the other. Several stylized facts are explained thereby.

Suggested Citation

  • Shailendra Raj Mehta, 1998. "The Law of One Price and a Theory of the Firm," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 137-156, Spring.
  • Handle: RePEc:rje:randje:v:29:y:1998:i:spring:p:137-156

    Download full text from publisher

    File URL:
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rje:randje:v:29:y:1998:i:spring:p:137-156. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.