A formal model of firm boundaries and haggling
Economics Letters, 2017, vol. 156, issue C, 15-17
This study provides a formal model of Williamson’s haggling theory in which transacting parties engage in ex post contract renegotiation. We show that integration can economize bargaining costs but suffers from too much third-party arbitration (i.e., fails in selective intervention).
Keywords: Transaction cost; Haggling; Fiat; Firm boundaries (search for similar items in EconPapers)
JEL-codes: D23 L22 M21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:156:y:2017:i:c:p:15-17
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