Thinking about the Firm: A Review of Daniel Spulber's The Theory of the Firm

Oliver Hart

Journal of Economic Literature, 2011, vol. 49, issue 1, 101-13

Abstract: In this review, I describe how economists have moved beyond the firm as a black box to incorporate incentives, internal organization, and firm boundaries. I then turn to the way that the theory of the firm is treated in Daniel Spulber's book The Theory of the Firm: Microeconomics with Endogenous Entrepreneurs, Firms, Markets, and Organizations . Spulber's goal is to explain why firms exist, how they are established, and what they contribute to the economy. To accomplish this, Spulber defines a firm to be a transaction institution whose objectives differ from those of its owners. For Spulber, this separation is the key difference between the firm and direct exchange between consumers. I raise questions about whether this is a useful basis for a theory of the firm. (JEL D21)

JEL-codes: D21 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/jel.49.1.101
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Citations: View citations in EconPapers (34)

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