(I plan to go through the line of the study of firm theory from Coase – Williamson – Hart – other researchers (Teece, Holmstrom&Milgrom, Gibbons&Kevin, Simon, etc.). This is the first one.)
Reading notes on Coase’s classical papers + one Steven N. S. Cheung’s paper
Appendix: 組織の経済学：企業の境界 (伊藤秀史) + 組織と制度の経済分析：展望 (石黒真吾)
A failure of economic theory to examine its foundational assumptions:
a clear definition of firm → should be 1) correspond with the real world, 2) tractable by 2 most powerful instruments: the margin and substitution
Economist: the economic system as working itself and being co-ordinated by the price mechanism to allocate factors of production between different use → admit individual planning but object to economic planning
=> however, Firm: allocation are decided by orders → not individual planning but economic planning that constitute a large sphere of our economic system
Although economists also admit organisation and co-ordinating within it, what’s the difference between the co-ordinating production of organization (ordered transaction /entrepreneur-co-ordinator without price mechanism) and market (a series of exchange transactions with price mechanism)? → Why two co-ordinating methods? Which is alternative? Why choice? Why is there any organisation? (if market/price mechanism can do anything) → the case of vertical integration
# => a combined economic system: individual obeying (bounded rationality) + firm planning (economic rationality) => economic specialisation
The main reason why it is profitable to establish a firm: there is a cost of using the price mechanism: (can be reduced/minimisied but not eliminated)
 (most obvious) discovering what the relevant prices are = information cost
 cost of negotiating and concluding a separate contract for each exchange transaction = cooperation (employment: contract that one agrees to obey entrepreneur for remuneration within certain limits = incomplete contracts)
 owing to risk attitude + difficulty of forecasting, the longer the contracting, the less possible and desirable (p) to specify that the other (a) is expected to do = contract expressed in general terms with the limits to what (a) to do not details what to do, the exact details left until later = residual control right
=> a firm is likely therefore to emerge in cases where a very short term contract would be unsatisfactory (important in services and labours not commodities which can be state in advance with details)
==>> entrepreneurs forming an organisation (allowing some authority) to save costs of market operations/carry out his function at less cost
 firm emerge with the existence of uncertainty (but not relevant to Knight’s mode of payment as mark of firm) => facing uncertainty under entrepreneur-co-ordinator (not price mechanism)
 exchange on market and organised within firm are often treated differently by Governments other other regulatory powers (e.g. sales tax v.s. income tax) (only enforcement effect as firms already exist)
 quota schemes, and methods of price control, allowing advantages to who organises, necessarily encourage the growth of firms (again not brought firms into existence)
(note1: recently tc are generally/succinctly recognized as [i] search and information costs; [ii] bargaining and decision costs; [iii] policing and enforcement costs.
note2: there are also another interesting idea that tcs can also arise from natural human emotions)
=> a firm becomes larger as additional transactions of market through price mechanism are organised by the entrepreneur, and smaller as abandoning the organisation of such transactions → why is there market if firm lower costs?
=>> diminishing returns to management: +
 cost of organising additional transactions within the firm rise → decreasing returns to the entrepreneur function
 (as transactions organised increase) the entrepreneur fails to make the best use of the facotrs of production
 the supply price of some factors of production may rise, as the other advantages of a small firm are greater
=>> a firm tend to be larger: a) the less the cost of organising and the slower these costs rise with increases in transactions organised, b) less likely the entrepreneur make mistakes and the smaller the increase in mistakes with …, c) the greater the lowering in the supply price of factors of production to firms of larger size
diminishing returns to management <= increase in a) spatial distribution of transactions organised, b) the dissimilarity of the transactions, c) probability of changes in the relevant prices (transactions tend to be different in kind or places) ← inventions (e.g. telephone) that improve managerial technique can solve
=> “a point must be reached where the costs of organising an extra transaction (+loss through the waste of resources) within the firm are equal to the costs involved in carrying out the transaction (+marketing costs of the exchange transaction) in the open market”
=> “the firm stops its expansion at a point below the costs of marketing in the open market + at a point to the costs of organising in another firm => a market transaction between 2 producers (if not combination), each of whom could organise it as less than the actual marketing costs ” (as – cost of organising another’s work + costs of carrying out an exchange transactions in the open market)
=> combination = transactions previously organised by two entrepreneurs become by one / integration = organisation of transactions which previously carried out on the market
Comparison with other theories:
division of labour: the growth of economic differentiation creates need for integrating force
→ why one integrating force (entrepreneur) substituted for another (price mechanism)
→ with uncertainty, in the internal organisation, the primary problem or function is deciding what to do and how to do (deciding&controlling), the actual execution is the second
→ for social organisation, goods produced for market are based on the basis of entirely impersonal prediction of wants, producers take responsibility of forecasting + such forecasting work and technological direction and control of production are concentrated upon a very narrow class of producers = entrepreneur
→ the confident and venturesome assume the risk or insure the doubtful and timid by guaranteeing to latter a specified income in return for an assignment of actual results = the function of guarantee and direction power = enterprise and wage system, which existence is the direct result of uncertainty
# uncertainty → forecast ← confidence ← entrepreneur → guarantee → power
criticism: 1) people with better knowledge and judgement can sell advice instead of taking production, 2) in contract, the contractor is guaranteed a certain sum providing performance but without any direction, 3) even in an economic system with no uncertainty there would be co-ordinators, though only a routine function.
Cost-curve of the firm:
perfect competition: firm is limited in size if cost curve slopes upward
imperfect competition: … limited in MR=MC
But: ignores the fact that there may be a point where it is less costly to organise the exhchange transactions of a new product than further ones of the old product → upward cost curve not give limitation to firm size
Fit in with reality:
 the essence of the legal concept of employer and employee: direction = economic concept
 At the margin, the costs of organising within firm will be equal either to the costs of organising in anohter firm or in market by price mechanism ← business men will be constantly experimenting, controlling more or less, and in this way, equilibrium will be maintained => equilibrium for static analysis
 dynamic factors: effect that changes on the cost of organising within firm and on marketing costs → firm size => moving equilibrium
 Initiative: forecasting and operates through the price mechanism by making of new contracts / Management: merely reacts to price changes, rearranging the factors of production under its control
The explicit introduction of the concept of transaction costs into economic analysis to explain the emergence of firm, and that’s all, not to change the character of economic theory ← developed by a young man who knew virtually no economics
“The problem of social cost”: used the transaction costs to demonstrate the way in which legal system could affect the working of the economic system, but not press beyond this
The alternative approach to industrial organization that Williamson presented depended on the distinction between markets and hierarchy, incorporated transaction costs into the analysis, and examined in much greater detail the problems of internal organization of the firm.
However, he ascribes the non-use of my thesis as “fundamental insight” but not “operational (to assess the efficacy of completing transactions as between firms and markets in a systemic way, 1975&reaffirmed1985).” ← “I think it is largely correct.” “Wallis and North have estimated that transaction costs are about 50% of the GNP.” “Incorporating these costs explicitly into analysis would have the most profound effects.” “The range of goods and services supplied, the pricing practices, the contractual arrangements, the forms of economic organization, all will be affect and interrelated”
1. unable to put transaction costs into mathematical form, due to no precise way to state the part which transaction costs play in the working
2. emphasis on the employer-employee relationship as the archetype of firm → an emphasis on the role of firm as a purchaser of the services of factors of production + on the choice of the contractual arrangement which it makes with them → not examine the contracts that enable to direct the use of capital by acquiring, leasing or borrowing it + neglect the main activity of a firm, running a business
=> submerge the key idea: the costs of coordinating within the firm with the costs of coordinating with costs of bringing about same result by market transactions
An economic system without firms:
there are a vast number of possible contractual arranges, but non direction of factors of production → allocation of resources respond to prices, but a great part would be absorbed in making the arrangements for contracts and in providing the information (transaction costs)
An economic system with firm:
1) profitable to organize a firm when its costs of operating(costs of contracting +costs of selling) are less than the transaction costs incurred in market ← series of contracts is substituted one (less complicated) = within the firm individual bargains/competition are eliminated + market transaction is substituted as administrative decision (although maybe some markets within firms)
2) the costs of operating is also lower than the costs that other firms would incur ← if not, other organized firms will make the first firm not profitable => institutional structure of production that minimizes total costs for output produced
# here Coase only mentioned about the contracting costs between factors of production as a part of transaction costs that make forming firm is profitable and thus reasonable. However, one would argue that administrative system also solve the problem of costs from meaningless internal bargaining, it also solve the bounded rationality. More important, this system that looks like a constrain can also provide incentives that market cannot provide by providing a large and consistent benefit prospect that an individual cannot imagine. This is done by sharing uncertainty (risk) and responsibility (right) which also comes from the same administrative system.
asset specificity: the investment with no value outside this transaction that give rise to the incentive for opportunistic behavior → realizing the possible opportunism by one-side or both sides, players will be loathe to make investments + making them in-house
=> real situation, but should discover when best by long-term contracts, when by vertical integration
1) Klein, Crawford, Alchian, “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process”: specific investment → quasi rents → possibility of opportunistic behavior → solved in integration or contracts + with high specificity, high rents, high gains from opportunism, costs of contracting will generally increase more t¥than costs of vertical integration
2) Coase: even though increase more, vertical integration will not displace long-term contract unless the costs of latter become greater than former + no systematic relationship
→ though the risk is real given the businessmen:”suppliers were often unwilling to sell too great a proportion of their output to one customer”, many contractual arrangements avoided the risk: a defrauding firm may make immediate gains but if it can be identified, future business is lost and thus make opportunistic behavior unprofitable at all
=> a) implementation of long-term contracts is commonly accompanied by informal arrangements not governed by contract; b) propensity for opportunistic behavior is usually effectively checked by the need to take account of the effect of firm’ action on future business; c) also contractual arrangements can reduce the profitability of opportunistic behavior (consuming firm paid for specialized equipment like dies)
=> sceptical about the asset-specificity argument
The acquisition by General Motors in 1926 of Fisher Body (+40%):
1) Klein…: the difficulties of drawing up contracts for the supply of bodies given incentive for opportunistic behavior + Fisher refused to locate their body plants adjacent to GM assembly plants, a move which GM claimed necessary for efficiency but required a large very specific investment
2) Coase: A. O. Smith, the largest frame makers with GM as main customer, had harmonious relations with GM for over 50 years without opportunism given expensive and highly specific equipment and shipping hundreds of miles to GM => sceptical about Fisher’s case
– not given an order for definite number of frames but releases of a specific quantity made throughout the year (similar to those in the long-term contracts)
– prices determined by annual negotiations but subject to renegotiation if there were modifications in design or changes in costs
– major model changes involve substantial expenditures for new tooling, the arrangement of production lines and learning time → tooling was either manufactured by Smith or purchased and the sold to and owned by their customers
=> nonetheless, as there were many aspects not covered by arrangement, GM was clearly in a position to act opportunistically / supported by metal trades in 19th century, highly specific investments which give an incentive for opportunistic behavior, but those who succumb would received little repeat business
=>>firms would emerge naturally to overcome the obstacles to their cooperation represented by extremely high transaction costs
/ but as these firms come into existence and expand, transaction costs would tend to fall because interfirm transactions would take the place of factor-factor transactions and this would brake expansion
/ bureaucratic rigidities/diminishing returns to management also raise a firm’s costs of coordinating as it expanded
=>> in “the nature of firm”: extend control as long as cost of organizing were less than costs of market transacting, but not investigate the factors that make costs of organizing lower for some firms than others → explain the institutional structure of production + why costs of organizing differs among firms → complex interrelationships: pricing practices, contractual arrangements, organizational forms (and all affected by the sate of law in “The problem of Social Cost”) => a theoretical scheme to be operational (require empirical work)
The contractual nature of the firm SNS Cheung – The Journal of Law and Economics, 1983
piece-rate contracts offer a useful gateway to an understanding of the firm as an organization, because payment by the piece falls squarely in between the market and the firm
(we do not exactly know what the firm is-nor is it vital to know. The word “firm” is simply a shorthand description of a way to organize activities under contractual arrangements that differ from those of ordinary product markets)
1. Firm as a form of Contractual Arrangement
2. The Piece-Rate Contract as an Illustration
3. The Ambiguity of firm Size
4. Concluding remarks
Coase meant by the market: the splitting of one transaction into two could not have gone so smoothly
Knight + Hayek, among others, shared an early interest in Coase’s subject matter
← But came the Keynesian revolution, and whatever not understand found refuge in various “imperfections.”
in 1960, Coase: social cost / Stigler: information / Arrow: appropriability of returns inept explanatory power of price theory
+ late: Aaron Director’s: tie-in sales / Armen Alchian: interpreting price and competition in terms of property rights
Coase was fortunate just as a tide was turning. My view is that transaction costs and contracting will someday be regarded as a basis for analysis rivaling marginalism in neoclassical economics.
What Is a Firm? – organizations and markets – Peter Klein, Harold Demsetz, JC Spender
1] Coase (1937) defines the firm in terms of the employment relation → A one-person operation, in this definition, is not a firm, and vertical integration deals with the question of adding producers of intermediate products to the firm’s employment roll
2] Demsetz thinks independent contractors are firms → hence it makes little sense to speak of “firm” and “market” as alternatives, as Coase does
3] Oliver Williamson noted that Coase expressed more interest in intermediate product markets in his 1988 article than in “The Nature of the Firm.”
4] Knight, Williamson, Hart → the firm is defined
not by the employment relationship, but by the ownership of alienable assets → question is who owns what, not who is employed by whom.
5] Dan Spulber → defining the firm as nexus of transactions with objectives different from those of its owners
6] Peter Klein: even in the Knightian approach → to get from [ one-person firm ] to [ multi-person firm ] → requires theory about the relative transaction costs of employment versus independent contracting (→ under which conditions the entrepreneur delegate judgment to subordinates)
7] Russell Coff: Barnard (1938) defined the term “Organization” as “System of consciously coordinated activities” → many theories of competitive advantage use this as a basis for defining the firm → cooperative relationships like alliances are well within the “firm.” → in some cases, aligns outside formal boundaries
8] Demsetz, Harold. (1997 ). The Economics of the Business Firm: Seven Critical Commentaries → reminds us there are several distinct definitions of the firm, including one that allows for the sole contractor → so Barnard’s definition cannot be the only one admissible
Comments by JC Spender
the question is not ‘what is the firm?’ but about answering it using the ‘axioms of economics’ → Simple neoclassical notions do not work well here, leading to the observation that the ‘theory of the firm’ is actually a theory of markets.
To get into the ‘black box’ → two traditional approaches (Coase):
1) heterogeneous asset-based → ‘make or buy decision’
2) differential power relationship-based → employment relationship
=> neither works well enough to give us insights that are not obviously entailed in the axioms adopted → i.e. if economics is about maximization, then firms are economic entities that maximize profit or, if firms are about the exercise of power, those with most power direct them
Knight proposed a new axiom
→ distinguishing between [ full rationality | the injection of human judgment or agency ] when the preconditions for rationality alone were not met
→ lead to Simon’s ‘bounded rationality’ (much cited and little used)
→ no theory of the firm beyond that sketched in Administrative Behavior.
→ an interesting new way lies in the Knightian direction → the generation and application of managerial judgment in response to Knightian uncertainty
→ Penrose translated Knight’s insights into the beginnings of a viable new theory → outside microeconomics → no useful answer within economics
→ see the firm as something managed – where both assets and relationships are being managed → a ‘theory of the managed firm’
→ 組織の非効率性の源泉 ＝ 市場の非効率性の源泉
準レントが大きいほど，相手に対する独占的な立場を利用して(barginning power)取引から生じる利益を少しでも多く獲得したいという意図 → 危険が高まる取引の価値が減少する
＝＞ 取引当事者を (垂直) 統合し，取引を内部化することによっ て，非効率性が緩和される（階層的な管理機構が権限関係を用いて事後的に適応）← なぜ同様の権限関係を市場で実現できないのか？
2。Incomplete contract＝ a)規定されてない状況と義務 ＋ b)完全観察が不可能
＝＞ 取引が複雑なほど，または不確実性が大きいほど(the level of TC&incomplete contract)，組織内で/垂直統合が行われる可能性が高まる
Francine Lafontaine and Margaret Slade. Vertical integration and firm boundaries: The evidence. Journal of Economic Literature, 45:629–685, 2007
関係特殊性 (準レント) の測定: 1）インタビュー，アンケート、定性的なデータ、2） 部品の複雑さ，労働者特有の知識，契約企業間の物理的な近さ，R&D 支出等
組織内／統合の費用：(Williamson, 1985, Chapter 6)
2。決定が政治的に扱われる：権限を持つ組織上位者に対して下位の者が働きかけることで 生じる (influence活動とinfluence・cost)
事前のincentive問題：(property rights approach)
2。asymmetric information → moral hazard + adverse selection
3。property rights approach (Grossman&Hart1986, Hart&Moore1990, Hart1995)
→ Williamsonと異なる(Gibbons,Four formal theories of the firm?, 2005, p.201)
→ 企業：(非人的) 資産の集合体 ＋ 資産の所有：残余コントロール権の獲得
→ 企業の境界 (資産所有パターン)→事後交渉での外部機会→事後交渉での合意における利得→ 事前のインセンティブ
1。(Hart,Reference points and the theory of the firm, 2007): move away from Coase (1960) and back in the direction of Coase (1937)
2。Gibbons (2005)：◆事前incentive問題：“property-rights” and “incentive-systems” theories ◆ 事後適応問題：“rent-seeking” and “adaptation” theories
3。Baker et al. (2008)，Hart and Holmstrom (2008)，Hart (2009)
1。Williamson (1985, pp.83–4)：かつて私は，中間的な種類の取引というのは組織化することが難しく安定的でないので，[現実の取引様式の分布としては，純粋な市場と純粋な組織の 2 つの山があるという意味で] 二峰性分布がより正確に現実を表すと考えていた (Williamson, 1975)．しかし 今では，中間領域の取引は非常によく観察されるものだと考えるようになった
2。今井・伊丹・小池 (1982)，Imai and Itami (1984) Interpenetration of organization and market: Japan’s firm and market in comparison with the u.s
→市場原理：M1 価格を情報媒体，個人的利益・効用最大化による自由な交換 M2 自由な参入・退出
→組織原理 O1 権限による命令，共通利害の最大化 O2 固定的・継続的関係
3。Baker et al. (2002) Relational contracts and the theory of the firm. (2008) Strategic alliances: Bridges between islands of conscious power
Organizations Are A Mess…But Not A Mystery:
■“Economic Governance,” compiled by the Economic Sciences Prize Committee of the Royal Swedish Academy of Sciences, 12 October 2009.
■ George Baker, Robert Gibbons, and Kevin J. Murphy. Relational contracts and the theory of the firm. Quarterly Journal of Economics, 117:39–84, 2002
■ George P. Baker, Robert Gibbons, and Kevin J. Murphy. Strategic alliances: Bridges between “islands of conscious power”. Journal of the Japanese and International Economies, 22:146–163, 2008
■ Robert Gibbons. Four formal(izable) theories of the firm? Journal of Economic Behavior and Organization, 58:200–245, 2005
■ Avinash Dixit. Governance institutions and economic activity. American Economic Review, 99:5–24, 2009
■ Sanford J. Grossman and Oliver D. Hart. The costs and benefits of ownership: A theory of vertical and lateral integration. Journal of Political Economy, 94:691–719, 1986
■ Oliver Hart. Firms, Contracts, and Financial Structure. Oxford University Press, Oxford, 1995
■ Oliver D. Hart. Reference points and the theory of the firm. NBER Working paper 13481, October 2007
■ Oliver Hart. Hold-up, asset ownership, and reference points. Quarterly Journal of Economics, 124:267– 300, 2009
■ Oliver Hart and Bengt Holmstrom. A theory of firm scope. NBER Working Paper 14613, December 2008
■ Oliver Hart and John Moore. Property rights and the nature of the firm. Journal of Political Economy, 98: 1119–1158, 1990
■ Bengt Holmstrom and Paul Milgrom. The firm as an incentive system. American Economic Review, 84(4): 972–990, September 1994
■ Ken-ichi Imai and Hiroyuki Itami. Interpenetration of organization and market: Japan’s firm and market in comparison with the u.s. International Journal of Industrial Organization, 2:285–310, 1984
■ Francine Lafontaine and Margaret Slade. Vertical integration and firm boundaries: The evidence. Journal of Economic Literature, 45:629–685, 2007
■ Herbert A. Simon. Organizations and markets. Journal of Economic Perspectives, 5:25–44, 1991
■ Oliver E. Williamson. Markets and Hierarchies: Analysis and Antitrust Implications. The Free Press, New York, 1975.
■ Oliver E. Williamson. The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting. The Free Press, New York, 1985
■ Oliver E. Williamson. The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38:595–613, 2000
■ 伊藤秀史「市場と組織──原理の相互浸透と企業の境界」伊藤秀史・沼上幹・田中一弘・軽部大（編） 『現代の経営理論』 有斐閣，2008 年 11 月，pp.73–102．
■ 伊藤秀史「組織の経済学」石黒真吾・中林真幸 (編)『比較制度分析入門』有斐閣より出版予定，第 2 章．
■ 伊藤秀史「ノーベル経済学賞の２氏 市場の枠超え，ガバナンスの仕組み解く」『週刊エコノミス ト』11 月 24 日号． 16
■ 新原浩朗『日本の優秀企業研究：企業経営の原点――6 つの条件』日本経済新聞社，日経ビジネス人 文庫，2006 年．
R. Coase (1937)：市場取引を内部化することで，市場における取引費用（交渉費用，取引相手の探索費用，情報収集費用など）を節約できる ＝＞ 一部取引が発生しない
→ 問題：1。組織構成員の利害は完全には一致していない、2。情報の非対称性、3。契約の不完備性 ＝＞ 結果：incentive低下、資源配分の歪み
1。G. Akerolf, J. Stiglitz, M. Spence など
2。mechanism design: 取引制度や組織構造を与件とみなすのではなく，それ自体を設計しようという問題（L. Hurwitz, E. Maskin, R. Myerson）
1。asset specificity：当該取引相手以外での取引では価値が低下するような資産 → 事後的な交渉の費用による事前の過少投資の発生 → この「取引費用」を削減するために部品生産を内部化する （垂直統合）
→ 契約に代わる役割として「所有権」：残余コントロール権：契約に明記されない出来事が生じた場合，物的資産を自由に 処分・利用する権利 ＋ 物的資産の所有を通じて他の主体に対する Power を獲得 (an empolyer has power over a worker becasue the empolyer owns the physical capital the worker uses… (Hart (1995, p.5)???) （権限＝benefit）
→ 「コースの定理」：完備な契約が事前に書ければ，取引はすべて契約で実行可能．よ って，所有権の配分は効率性には影響なし／契約が不完備な場合，所有権を誰に配分するかは取引全体の効率性に影響を与える（権限＝incentive）
（Weber：形式権限と実質権限、P. Aghion, J. Tirole：権限の配分、権限移譲：incentive促進＋支配減少）
1。P. Milgrom & J. Roberts：「企業」＝「(労働者と管理者?)相互に補完しあうincentive手段の束」
→ incentiveを与える：物的資産の保有、成果型報酬、制限の少ない生産活動（労働）(?) → この3っは相互に補完的(complementary/supermodular) ：ある要素投入にともなう限界利益は，他の要素投入の増加によって上昇する
1。企業の組織はどのように変化するのか（例：分権化 vs 集権化）？／企業の組織変化は市場や経済発展のプロセスとどのように関 わるのか？(Ishiguro)
→ 企業組織の選択と市場均衡との動学的な相互作用：問屋制（分権）⇒ 工場制（集権）⇒ 現代大企業（分権）
→ 暗黙的な長期関係に基づく非市場システム（関係融資や共同体的配分など）を，市場システムの生成や経済発展との関連においてとらえる：関係依存型ガバナンス ⇒ 市場型ガバナンス
→ 経済発展における公式制度（財産権保護，裁判所による公的な契約執行など）の役割 (D. North)
→ 歴史における私的な契約執行制度の役割（A. Greif）
（私的制度：明示的な契約・約束によらない，暗黙の了解に基づく行動規則（慣習，文化，規範なども含む）⇒ 人々は自己利益に基づき暗黙の合意に従う (D. Hume））
⇒ 公式制度の成立と私的制度の役割との関係(代替的 or 補完的)
→ 植民地政策と「制度の移植」（例：私的財産権保護など）との 関係（D. Acemoglu）
→ 「分業」(A. Smith) とは技術効率の問題か組織の問題か？(D. Landes, S. Marglin)．
1. Transaction Cost economics
Coase, “The nature of the firm”, Economica, 1937
Williamsom, “Economics and Organization: A Primer”, California Management Review, Vol 38, n.2, winter 1996.
Baumol, “Williamson’s The economic institutions of capitalism”, Rand Journal, vol 17 no. 2, Summer 1986
2. The problem of Asymmetric Information
Akerlof, “The Market for Lemons”, Quarterly Journal of Economics, 89 pp. 488/500, 1970
Spence, “Job Market Signaling “ Quarterly Journal of Economics, August 1973
3. Agency problems
K.J. Arrow, “The economics of agency”, Chapter 2 in: Principals and Agents: The Structure of Business (Research colloquium / Harvard Business School) – February, 1991 Edited by John W. Pratt and Richard J. Zeckhauser
4. formal models for Employment
Edward P. Lazear, “Labor Economics and the Psychology of Organizations”, Journal of Economic Perspectives, V.5, N.2, 1991.
Edward P. Lazear, “Personnel Economics and Economic Approaches to Incentives,” HKCER Letters 61 (Sept/Oct 2000): 1-8.
5. formal models for Employment and Executive Compensation
George P. Baker, Michael C. Jensen y Kevin J. Murphy, “Compensation and Incentives: Practice vs. Theory”, Journal of Finance, V. XLIII, N.3, 1988
Michael C. Jensen y Kevin J. Murphy, « CEO Bonus Plans: And How To Fix Them », HBS Working Paper 12-022.
8. conventional economic models of the Firm
T.H. Chiles and J.F. McMackin, “Integrating Variable Risk Preferences, Trust, and Transaction Cost Economics”, Academy of Management Review, Jan. 1996.
O. Williamson, “Calculativeness, Trust, and Economic Organization”, Journal of Law and Economics, 36, 453-486
D.M. Kreps, “Corporate Culture and Economic Theory”,
Baker, George, Robert Gibbons, and Kevin Murphy, “Informal Authority in Organizations”, Journal of Law, Economics and Organization, vol 15 no 1, 1999
Gibbons, Robert, “Incentives in Organizations”, Journal of Economic Perspectives, vol 12 no. 4, Fall 1998, pp. 115/132
9. alternative approaches to Decision Making in organizations
H. A. Simon, “Organizations and Markets”, Journal of Economic Perspectives, Spring 1991.
Schelling, Thomas, “Egonomics or the art of Self-Management”, The American Economic Review, vol 68 no. 2, May 1978.
Bazerman, Max, Ann E. Tenbrunsel, and Kimberly Wade-Benzoni, “Negotiating with yourself and losing: making decisions with internal competing preferences”, Academy of Management Review, vol 23 no. 2, pp 225-241, 1998.
Cooter, Robert, and Melvin Eisenberg, “Fairness, Character and Efficiency in Firms”, UC Berkeley School of Law, Public Law and Legal Theory Working Paper no. 55, April 2000
O’Donoghue, Ted and Matthew Rabin, “Doing it Now or Later”, The American Economic Review, vol 89 no. 1, March 1999
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6. the nature of Knowledge in organizations
Nonaka, I. (1994). “A Dynamics Theory of Organizational Knowledge Creation”, Organization Science, vol. 5, No. 1, February.
Spender, J-C. (1994) “Organizational Knowledge, Collective Practice and Penrose Rents”, International Business Review, vol. 3, No. 4.
Andreu, R. and Sieber, S. (2000). “Learning Trajectories: A Source of Requirements for Effective Knowledge Management”, Proceedings of the BPRC Conference on Knowledge Management: Concepts and Controversies, Warwick University, February 10- 11.
7. Knowledge management in the theory of the firm
Kogut, Bruce and Zander, Udo (1992). “Knowledge of the firm, combinative capabilities, and the replication of technology”, Organization Science.
Connor, Kathleen R. (1991). “A historical comparison of resource-based theory and five schools of thought within industrial organization economics: Do we have a new theory of the firm?”, Journal of Management, vol. 17, No.1, pp. 121-154.
Foss, Nicolai (1996). “Knowledge-based approaches to the theory of the firm: Some critical comments”, Organization Science, vol. 7, No. 5, pp. 470-476.
Connor, Kathleen R. and Prahalad, C.K. (1996). “A resource-based theory of the firm: knowledge versus opportunism”, Organization Science, vol. 7, No. 5, pp. 477-501.
Kogut, Bruce and Zander, Udo (1996). “What do firms do? Coordination, Identity, and Learning”, Organization Science, vol. 7, No. 5, pp. 502- 523.
10. Trust and the limits of economics
S. Ghoshal and P. Moran, “Bad for Practice: A Critique of Transaction Cost Theory”, Academy of Management Review, Jan. 1996.
O. Williamson, “Economic Organization: The Case for Candor”, Academy of Management Review, Jan. 1996.
S. Ghoshal and P. Moran, “Theories of Economic Organization: The Case for Realism and Balance”, Academy of Management Review, Jan. 1996.
C. Portales, JE Ricart and JM Rosanas, “Understanding Trust to Build Strong Relationships in Organizations”, in Managing Strategically in an Interconnected World, Ed. By MA Hitt, JE Ricart and R.D. Nixon, SMS Series, Willey, 1998. DI-360-E