We explore the role of firms in insuring non-verifiable output. As a device that allows workers to commit to the delivery of their output, the firm arises endogenously as an alternative to the market if workers are sufficiently risk averse and the firm can base its incentive payments on good...

This paper discusses various ways to organise these consultations, so that a compromise agreement is reached on the solution of the (re)distribution problem. These institutionalised structures of consultation are referred to as 'matching zones' here. Practical experiences, mainly from the...

Municipalities may have various motives for decisions on the mode of their task execution. Empirical studies – based on both public choice and transaction costs theory - have not yet provided a fully comprehensive explanation for municipal contracting out decisions. Therefore, we held...

In this era of globalization we see an increase in specialization: the production chain is

We present a dynamic model of the interaction between interest groups and policymakers, featuring endogenous interest group formation. We show that complicated dynamic patterns in economic policies may arise once interest group formation is taken into account. <BR><BR>

This paper examines the relationship between organization contextual variables and human resource management (HRM) practices in small firms. The proposed model is based on an integration of theoretical perspectives, including the resource-based approach, institutional theory, transaction cost...

A worker's utility may increase with his income, but envy can make his utility decline with his employer's income. This article uses a principal-agent model to study profit-maximizing contracts when a worker envies his employer. Envy tightens the worker's participation constraint and so calls...

Organizational theory has construed complexity as an objective characteristic of either the structure or the behaviour of an organization. We argue that to further our understanding it should be understood in terms of human cognition of a structure or behavior. This cognitive twist is...

How much does a nation spend on resources to 'grease the wheels of trade'? To examine this question the Dutch economy is used as an exemplary case as the Netherlands are known as a nation of traders. This image was derived in the seventeenth century from successes in long distance trade,...

We model a firm in an institutional market setting, consisting of a production technology and its governance. The governance consists of a hierarchical firm structure, a cost efficiency parameter,and an internal pay system. The depth of the firm is determined by profit maximization under the...