Do norms matter for firm boundaries?

Ola Kvaløy

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2008, vol. 37, issue 3, 969-975

Abstract: Even though norms have been integrated in the formal theory of the firm, we have not seen a clear-cut relationship between norms and firm boundaries. In a simple game of relationship specific investments, I show that the parties' reputation for being trustworthy may be decisive for optimal asset ownership.

Date: 2008
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