We discuss contract theory from a combined Austrian/new institutional view. In the latter view, the world is seen as shot through with ignorance and transaction costs, but, as a tendency, entrepreneurial activity responds to the problems caused by these. All modeling must critically reflect...

Bounded rationality has often been invoked in the theory of economic organization, mainly to rationalize contractual incompleteness. I argue that one may distinguish between thin and thick notions of bounded rationality; that models that rely on thin notions are often effectively...

The knowledge-based approach and organizational economics are usually seen as offering opposing approaches to the explanation of organizational phenomena. Relying on a taxonomic framework from the philosophy of science, we argue that many differences between these approaches are more apparent...

Proponents of the emerging knowledge-based (resource-based, competence-based, etc.) theory of the firm have subjected more traditional economics of organization theories to strong critiques. Rather than directly answering this critique, we examine key ideas of the knowledge-based approach, and...

Proponents of the knowledge-based approach to the firm argue that organizational economics put all the burden on the allocation of incentives and property rights in the explanation of organizational phenomena, and neglects firm-specific knowledge and processes of learning. We argue that there is...

Many writers argue that economic organization will be strongly transformed in the emerging knowledge economy. Thus, authority relations will wither, or at least undergo significant changes; legal and ownership-based definitions of the boundaries of firms will become irrelevant; and there will be...