Incomplete Contingent Labor Contract, Asymmetric Residual Rights and Authority, and the Theory of the Firm
In the paper the trade-offs among endogenous transaction costs caused by two-sided moral hazard, exogenous monitoring cost, and economies of specialization are specified in a Grossman, Hart and Moore (GHM) model to absorb Maskin and Tirole’s recent critique and Holmstrom and Milgrom’s criticism of the model of incomplete contract. The extended GHM model allowing incomplete contingent labor contract as well complete contingent contract of goods trade is used to explore the implications of structure of ownership and residual rights for the equilibrium network size of division of labor and productivity.
|Date of creation:||May 2000|
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- Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
- Eric Maskin & John Moore, 1999.
"Implementation and Renegotiation,"
Review of Economic Studies,
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- Eric Maskin & John Moore, 1999. "Implementation and Renegotiation," Harvard Institute of Economic Research Working Papers 1863, Harvard - Institute of Economic Research.
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- 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.
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- Robert Gibbons, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-132, Fall.
- Robert Gibbons, 1998. "Incentives in Organizations," NBER Working Papers 6695, National Bureau of Economic Research, Inc.
- Jeff Borland & Xiaokai Yang, 2006. "Specialization, Product Development, Evolution Of The Institution Of The Firm, And Economic Growth," World Scientific Book Chapters,in: Inframarginal Contributions To Development Economics, chapter 12, pages 291-325 World Scientific Publishing Co. Pte. Ltd..
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- Xiaokai Yang & Yew-Kwang Ng, 2006. "Theory Of The Firm And Structure Of Residual Rights," World Scientific Book Chapters,in: Inframarginal Contributions To Development Economics, chapter 10, pages 231-258 World Scientific Publishing Co. Pte. Ltd..
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- Xiaokai Yang, 1994. "Endogenous vs. exogenous comparative advantage and economies of specialization vs. economies of scale," Journal of Economics, Springer, vol. 60(1), pages 29-54, February.
- Eric Maskin & Jean Tirole, 1999. "Two Remarks on the Property-Rights Literature," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 139-149.
- Eric Maskin & Chenggang Xu, 2001. "Soft budget constraint theories: From centralization to the market," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(1), pages 1-27, March.
- Maskin, Eric & Xu, Cheng-Gang, 2001. "Soft Budget Constraint Theories: From Centralization to the Market," CEPR Discussion Papers 2715, C.E.P.R. Discussion Papers.
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- Murakami, Naoki & Liu, Deqiang & Otsuka, Keijiro, 1996. "Market Reform, Division of Labor, and Increasing Advantage of Small-Scale Enterprises: The Case of the Machine Tool Industry in China," Journal of Comparative Economics, Elsevier, vol. 23(3), pages 256-277, December.
- Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
- John J. Wallis & Douglass North, 1986. "Measuring the Transaction Sector in the American Economy, 1870-1970," NBER Chapters,in: Long-Term Factors in American Economic Growth, pages 95-162 National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)
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