Why Capital Hires Labor: A Bargaining Perspective.
Organizational forms often serve as vehicles for the appropriation of quasi-rent. Capitalist firms typically emerge when production requires noncontractible investments in specific physical assets because worker control would divert quasi-rents away from ass et owners ex post. Conversely, labor-managed firms tend to emerge in niches requiring specialized human capital but general-purpose physi cal assets. A key result is that capitalist firms can persist in competitive markets even when labor-managed firms would yield a larg er total surplus. Copyright 1993 by American Economic Association.
Year of publication: |
1993
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Authors: | Dow, Gregory K |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 83.1993, 1, p. 118-34
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Publisher: |
American Economic Association - AEA |
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