Networks in a Firm: Why Firms

Li Way Lee () and Aaron Keathley ()
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Li Way Lee: Wayne State University
Aaron Keathley: Wayne State University

Chapter Chapter 1 in 45 Conversations About Behavioral Economics, 2022, pp 3-6 from Springer

Abstract: Abstract One day in early 1930s, a British college student by the name of Ronald Coase boarded a ship bound for North America. He found his way to Ford and GM assembly plants in Michigan. There, he spent a year looking for an answer to the question that had been bugging him: If prices were so good at allocating resources—as all his professors were telling him—then why would there be so many foremen and managersmanager who make their living by performing the same function? Why are there “…islands of conscious power in this ocean of unconscious operation like lumps of butter coagulating in a pail of butter milk?” (Robertson in The Control of Industry, Harcourt, Brace and Company, New York, 1923, p. 84) Coase's answer, half of a century later, won him a Nobel Prize in economics. What is his answer?

Date: 2022
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DOI: 10.1007/978-3-031-05046-6_1

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