This paper studies the emergence of firm asymmetry as an equilibrium outcome. We consider differentiated Cournot and Bertrand duopolies where firms endogenously select their organizational governance and their timing strategy. For Cournot competition asymmetric and symmetric equilibria may...

Considering a principal-agent model in which the difficulty of the agent's action is better known ex interim than ex ante, we compare two contracting regimes; one with commitment to an ex ante negotiated contract, and one with an ex interim negotiated contract. The ex ante contract cannot have...

The traditional concentration of basic research activities in academic settings, with applied research more prevalent in industrial settings, is a distinguishing feature of science and technology markets. This structure arises from a unique combination of product characteristics, and in turn it...

The analysis of economic institutions stands to gain from a consideration of the interactionist theory of institutions, a resource-based view of organizations to develop business and economic perspectives, and a linkage between the two and any theory of economic institutions. A resource-based...

We ask how bargainers' incentives to communicate about more efficient widget designs depend on whether they negotiate price prior to, or after, fixing the traded design. We find three effects: (1) Since communication reveals information about preferences, bargainers with little power prefer to...

This paper contributes to the literature on the foundations of incomplete contracts. In a holdup framework, we provide two sets of conditions under which simple delegation of authority is the solution to the complete-contracting problem. In cases where overinvestment can be ruled out, delegation...

Internal organization relies heavily on psychological consistency requirements. This perspective has been emphasized in modern compensation theory, but has not been extended to organization theory. The idea is developed by starting from Williamson's discussion of idiosyncratic exchange. The...

We investigate factors influencing the choice of liability status by the owners of start-up firms. We propose a theoretical model that encompasses risk aversion, as well as differentials across liability states in the cost of capital and tax rates, as reasons why entrepreneurs choose one...

This paper analyzes the recent progress in the understanding of a class of organizations known as hybrid forms. The growing literature on these forms, standing between markets and hierarchies, raises important questions about their nature and role in a market economy. Adopting a transaction-cost...

This paper develops a theoretical model that determines the optimal ownership arrangement in an imperfect market and government institutional environment, especially in transitional economies. It studies the interdependence of institutional environments and ownership arrangements. The theory...