The paper begins by providing a brief overview and discussion of the modern economics of organization, concentrating in particular on the work of incomplete contract theorists. I then turn to a discussion of Loasby’s view of the firm and incomplete contracts. The point here is that while...

This paper makes the point that Thorstein Veblen should be considered one of the important precursors of the emerging competence-based approach to the firm. Thus, the emphasis in this literature on firms as path-dependent entities characterised by their heterogeneous knowledgebases, operating...

This paper develops a property rights-based view of strategy (the “PRV”). A property right (or economic right) is an individual’s net valuation, in expected terms, of the ability to directly consume the services of an asset (including, e.g., a monopoly position) or consume it indirectly...

Austrian economics allows us to identify a number of weak spots in the modern economics of organization that all relate to the treatment of knowledge. Specifically, this body of theory is open to the same kind of objections that HAYEK [1937, 1945] raised against economics, namely that it does...

I discuss and compare alternative approaches to integrating bounded rationality with the theory of economic organization, concentrating on the organizational capabilities approach, which is strongly influenced by the works of Nelson and Winter, organizational economics, particularly transaction...

We analyze a key problem in organization theory and design, namely the potential tension between authority (i.e., the power to make decisions which guide the decisions of another person) and the discretion of employees (i.e., the ability of an agent to control resources including his own human...