Reference Points and the Theory of the Firm

Oliver Hart

No 13481, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this article I argue that it has been hard to make progress on Coase's theory of the firm agenda because of the difficulty of formalizing haggling costs. I propose an approach that tries to move things forward using the idea of aggrievement costs, and apply it to the question of whether a transaction should be placed inside a firm (in-house production) or in the market place (outsourcing).

JEL-codes: D23 D86 K12 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-bec, nep-com and nep-law
Note: CF LE
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Citations: View citations in EconPapers (1)

Published as Oliver Hart, 2008. "Economica Coase Lecture Reference Points and the Theory of the Firm," Economica, London School of Economics and Political Science, vol. 75(299), pages 404-411, 08.

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