Showing 1 - 10 of 13
We reconsider the property rights approach to the theory of the firm based on incomplete contracts. We explore the implications of different degrees of relationship-specificity when there are two parties, A and B, who can make investments in physical capital (instead of human capital). If...
Persistent link: https://www.econbiz.de/10011112525
In the property rights approach to the theory of the firm (Hart, 1995), parties bargain about whether or not to collaborate after non-contractible investments have been made. Most contributions apply the regular Nash bargaining solution. We explore the implications of using the generalized Nash...
Persistent link: https://www.econbiz.de/10011113898
The government and a non-governmental organization (NGO) can invest in the provision of a public good. In an incomplete contracting framework, Besley and Ghatak (2001) have argued that the party who values the public good most should be the owner. We show that this conclusion relies on their...
Persistent link: https://www.econbiz.de/10011113909
This paper provides a non-technical discussion of the incomplete contracting approach to the theory of the firm developed by Grossman and Hart (1986). This approach offers an answer to the questions regarding the boundaries of the firm first raised by Coase (1937).
Persistent link: https://www.econbiz.de/10005621358
This article provides a non-technical survey on recent topics in the theory of contracts. The hold-up problem is presented and the incomplete contracts approach is discussed. Emphasis is put on conceptual problems and open questions that await further research.
Persistent link: https://www.econbiz.de/10005621420
A buyer and a seller can exchange one unit of an indivisible good. While producing the good, the seller can exert unobservable effort (hidden action). Then the buyer realizes whether his valuation is high or low, which stochastically depends upon the seller's effort level (hidden information)....
Persistent link: https://www.econbiz.de/10005622105
When two parties invest in human capital and at the same time decide on know-how disclosure it can be shown that joint ownership with veto power is the optimal ownership structure, given that only incomplete contracts can be written.
Persistent link: https://www.econbiz.de/10005623472
In this paper it is argued that privatization is not the only alternative to public ownership. Adopting the incomplete contract approach, it is shown that partial privatization may well be the optimal ownership structure. While in the standard incomplete contract model joint ownership is usually...
Persistent link: https://www.econbiz.de/10005790035
In this paper it is demonstrated that voluntary bargaining over a collective decision under asymmetric information may well lead to ex post efficiency if the default decision is non-trivial. It is argued that the default decision may be interpreted as a 'simple' contract that the parties have...
Persistent link: https://www.econbiz.de/10005836090
In this working paper, T.L. Anderson and F.S. McChesney’s book “Property Rights: Cooperation, Conflict, and Law” is discussed.
Persistent link: https://www.econbiz.de/10005837443