IDEAS home Printed from https://ideas.repec.org/p/ivs/iivswp/97-3.html
   My bibliography  Save this paper

Austrian Economics and the Theory of the Firm

Author

Listed:
  • Nicolai J. Foss

Abstract

Like most economists, Austrians have not shown much interest in the theory of the firm. This paper argues, however, that there is much in Austrian economics that dovetails with contemporary theorizing about the firm. Specifically, Austrian economics (in its Hayekian version) is compared to the two dominant approaches to the firm, the contractual and capabilities approaches. Austrian insights in the division of knowledge and the coordination of knowledge as well as insights in entrepreneurship complement this literature. However, it is also possible to develop a distinctly Austrian (coordination) view on firms that differs from both the contractual and the capabilities perspective. Whereas the contractual perspective conceptualizes the firm as nothing but a structure of incentives and property rights and the capabilities perspective conceptualizes the firm as a stock of given knowledge assets, the coordination view tends to see the firm as an entity that organizes a localized discovery procedures in the context of a structure of incomplete contracts and supporting shared mental constructs. In other words, the firm is seen as a cognitive entity.

Suggested Citation

  • Nicolai J. Foss, "undated". "Austrian Economics and the Theory of the Firm," IVS/CBS Working Papers 97-3, Department of Industrial Economics and Strategy, Copenhagen Business School.
    • Handle: RePEc:ivs:iivswp:97-3
    as

    Download full text from publisher

    File URL: http://ep.lib.cbs.dk/download/ISBN/8778690080.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Austrian economics; contracts; capabilities;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

    Statistics

    Access and download statistics

    Corrections

    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:ivs:iivswp:97-3. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: J. Petur Joensen (email available below). General contact details of provider: http://www.cbs.dk/forskning_viden/fakulteter_institutter_centre/institutter/oekonomi/ivs/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.