Reference Points and the Theory of the Firm

Oliver D. Hart

No 13481, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this article I argue that it has been hard to make progress on Coase's theory of the firm agenda because of the difficulty of formalizing haggling costs. I propose an approach that tries to move things forward using the idea of aggrievement costs, and apply it to the question of whether a transaction should be placed inside a firm (in-house production) or in the market place (outsourcing).

JEL-codes: D23 D86 K12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com and nep-law
Date: 2007-10
Note: CF LE
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