Complexity, Contract and the Employment Relationship
This paper introduces a model of contract incompleteness and bounded rationality based on the multi-tasking model of Holmstrom and Milgrom (1991). It is shown that the trade-off between the use of an employment relationship versus and explicit state contingent contract depends on number of tasks or complexity of the services provided by the individual.
|Date of creation:||01 Jan 1997|
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"The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
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- Jacques Cremer, 1986. "Cooperation in Ongoing Organizations," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 33-49.
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