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Marrying in the Cathedral: a Framework for the Analysis of Corporate Governance

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  • Ugo Pagano

Abstract

The firm can be seen as a centralization of market transactions and as a decentralization of a public ordering which allows the management of joint liabilities. The paper advances the view that the main reason for the firm’s existence is the unification and the internalization of liabilities. From this perspective, Coase's and Fuller's contributions to the theory of the firm can be married within the architecture of Calabresi's Cathedral. Because of specific (dis)investments, fundamental transformations from competition to managed bilateral monopoly take place either in the public or the private sphere and provide an explanation for the ultimate nature of the firm

Suggested Citation

  • Ugo Pagano, 2009. "Marrying in the Cathedral: a Framework for the Analysis of Corporate Governance," Department of Economics University of Siena 571, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:571
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    1. repec:dau:papers:123456789/12319 is not listed on IDEAS
    2. Klein, Benjamin, 2000. "Fisher-General Motors and the Nature of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 105-141, April.
    3. Brousseau,Éric & Glachant,Jean-Michel (ed.), 2008. "New Institutional Economics," Cambridge Books, Cambridge University Press, number 9780521876605, October.
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    11. Brousseau,Éric & Glachant,Jean-Michel (ed.), 2008. "New Institutional Economics," Cambridge Books, Cambridge University Press, number 9780521700160, October.
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    Cited by:

    1. Ugo Pagano, 2012. "No institution is a free lunch: a reconstruction of Ronald Coase," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 59(2), pages 189-200, July.

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    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets

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