Non-contractibility and Market Uncertainty in Franchise Systems
Franchisors face a tradeoff between centralization of decision rights and decentralization of decision rights. Regarding the problem, we developed a causal model considering that the relationship between non-contractibility of assets and the allocation of decision rights is not constant, but is contingent on market uncertainty. The results of the analysis showed that a franchise system would be centralized when (1) the franchisor's assets are intangible and are impossible to be transferred by contract, (2) the franchisees' assets are less intangible and are possible to be transferred by contract, and/or (3) the market is uncertain.
|Date of creation:||Dec 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 2-15-45, Mita, Minato-ku, Tokyo 108-8345|
Web page: http://ies.keio.ac.jp/old_project/old/gcoe-econbus/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grossman, Sanford J & Hart, Oliver, 1985.
"The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration,"
CEPR Discussion Papers
70, C.E.P.R. Discussion Papers.
- Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
- Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
- Hart, Oliver D. & Moore, John, 1990.
"Property Rights and the Nature of the Firm,"
3448675, Harvard University Department of Economics.
- Francine Lafontaine, 1992. "Agency Theory and Franchising: Some Empirical Results," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 263-283, Summer.
- Windsperger, Josef, 2004. "Centralization of franchising networks: evidence from the Austrian franchise sector," Journal of Business Research, Elsevier, vol. 57(12), pages 1361-1369, December.
- Blair,Roger D. & Lafontaine,Francine, 2011.
"The Economics of Franchising,"
Cambridge University Press, number 9780521775892, December.
- Luis Vázquez, 2005. "Up-front Franchise Fees and Ongoing Variable Payments as Substitutes: An Agency Perspective," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(4), pages 445-460, 06.
- Brickley, James A. & Dark, Frederick H., 1987. "The choice of organizational form The case of franchising," Journal of Financial Economics, Elsevier, vol. 18(2), pages 401-420, June.
- Sugato Bhattacharyya & Francine Lafontaine, 1995. "Double-Sided Moral Hazard and the Nature of Share Contracts," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 761-781, Winter.
- Rajiv Lal, 1990. "Improving Channel Coordination Through Franchising," Marketing Science, INFORMS, vol. 9(4), pages 299-318.
When requesting a correction, please mention this item's handle: RePEc:kei:dpaper:2012-023. 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: (Global COE Program Office)
If references are entirely missing, you can add them using this form.