Markets for Ownership

Joshua Gans

RAND Journal of Economics, 2005, vol. 36, issue 2, 433-455

Abstract: The prevailing theory of the firm demonstrates that ownership by dispensable, outside parties is inefficient relative to ownership by productive agents. To better understand observed patterns of ownership, I analyze markets for ownership, demonstrating that outside parties will often become asset owners. Outside parties earn rents only from ownership, whereas productive agents can earn rents even as nonowners. Given that their contribution is complementary with other productive agents, this mutes their willingness to pay for ownership relative to outsiders. The main conclusion is that the nature of ownership markets stands alongside incentives as an important predictor of firm boundaries.

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (13)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:36:y:2005:2:p:433-455

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().