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Control without Ownership: Public Insurance, Firm Boundaries, and Buyer Authority in Fixed-Factor Supply Chains

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  • Gerrit Meyerheim

Abstract

Public support can change not only who receives income but also who controls productive assets. I study a fixed-factor supply chain in which private state-contingent finance is costly or capacity constrained and owners choose among autonomy, contractual control, and integration. A general theorem for finite-state convex transfer technologies decomposes the policy effect on contractual-control value into state-solvency relief and the participation value of the gap between contractual and autonomous marginal support. A common-primitives two-state specialization gives closed-form sufficient conditions for ownership-control divergence and verifies them on an open parameter region. Under single crossing, support can reduce legal integration while increasing downstream protocol authority. A second-price buyer-menu mechanism separates buyer-form allocation from post-selection surplus division. Organizational change alters the recipient base and optimal support under a grant-like policy. A separate emergency-loan application illustrates repayable public liquidity. Private claim completion can eliminate the organizational effect.

Suggested Citation

  • Gerrit Meyerheim, 2026. "Control without Ownership: Public Insurance, Firm Boundaries, and Buyer Authority in Fixed-Factor Supply Chains," CESifo Working Paper Series 12963, CESifo.
    • Handle: RePEc:ces:ceswps:_12963
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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