Firms, Organizations and Contracts: A Reader in Industrial Organization

By Peter J. Buckley; Jonathan Michie | Go to book overview

Turing machines), and somewhat more on measures of complexity of strategies for supporting supergame equilibria. But these approaches have not, I think, led us in directions that will help with the problems encountered in this chapter, and I will not, in consequence, bother with references. Unforeseen contingencies have not otherwise arisen in the formal literature to my knowledge, and so on that subject, four years after it was originally promised, I can do nothing more than at long last offer for the reader's enjoyment Kreps ( 1988).


Notes
1.
In writing this chapter, I had tremendous difficulties coming up with a term for what it is that textbook economics and the Porter approach to strategy does not analyze. I will use organizational efficiency and effectiveness and words of that ilk, but I confess much unhappiness with them.
2.
The notion of a hierarchical transaction and its particular relevance to employment relationships is quite old--going back at least to Simon ( 1951).
3.
The role of reputation in hierarchical transactions also appears in Simon ( 1951).
4.
It might run thus: concentrated ownership of capital can be, as they show, efficient. Capital ownership by an individual might subject the individual to too much risk. Hence, for purposes of risk sharing we invent the limited stock corporation.
5.
The argument's flavor is easiest to suggest if we assume that the game will run precisely one hundred million rounds. In this case, roughly, the argument runs as follows: A, with many rounds to go, will want to test B to see if B will honor trust. At worst A loses $5 by doing so, and there is a one-in-one-thousand chance that A will make at least $10 in each of the many rounds left to go. But then what will B do when A tries him or her out? Even if B is not a moral person, B will honor that trust: to abuse it would reveal B's true character to A and would mean obtaining nothing in all subsequent rounds; honoring trust will cause A to take another chance for a long time to come worth $10 each time.
6.
The reader desiring a more exact analysis of the issues discussed here may wish to refer at this point to the Appendix near the end of the chapter, where a simple example is presented.
7.
Well, that is a bit of an overstatement. One must trade off unambiguity and the overall efficiency of the arrangement. In our earlier example of easy and hard problems and problems that do or do not require calculus, applying the calculus rule might be completely unambiguous, but as we make the necessity of calculus less and less predicative on the difficulty of the job, we lower the surplus derived from basing payment on the necessity of calculus. We could lower the predicative power of calculus to just the point where the arrangement still lives (test (ii) is just

-273-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Firms, Organizations and Contracts: A Reader in Industrial Organization
Table of contents

Table of contents

  • Title Page iii
  • Preface and Acknowledgements v
  • Acknowledgements vi
  • Contents viii
  • List of Contributors xi
  • Foreword xiii
  • Introduction and Overview 1
  • Notes 18
  • References 20
  • I. THEORY OF THE FIRM 21
  • 1: The Equilibrium of the Firm 23
  • 2: The Nature of the Firm 40
  • 3: The Organization of Industry 59
  • 4: Production, Information Costs, and Economic Organization 75
  • Summary 95
  • Notes 96
  • References 102
  • 5: Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure 103
  • Conclusions 151
  • Notes 151
  • References 163
  • 6: Transaction-Cost Economics: The Governance of Contractual Relations 168
  • Conclusion 192
  • 7: An Economist's Perspective on the Theory of the Firm 199
  • Conclusion 212
  • Notes 212
  • II. MARKETS AND INDUSTRIAL ORGANIZATION 219
  • 8: Corporate Culture and Economic Theory 221
  • Introduction 221
  • Conclusion 261
  • Appendix 262
  • Appendix 271
  • Appendix 273
  • References 274
  • 9: Co-operative Agreements and the Organization of Industry 276
  • References 292
  • 10: Interpenetration of Organization and Market: Japan's Firm and Market in Comparison with the US 293
  • Conclusion 317
  • References 319
  • 11: Vertical Quasi-Integration 320
  • Conclusions 336
  • Notes 337
  • 12: Non-Contractual Relations In Business: A Preliminary Study 339
  • 13: Goodwill and the Spirit of Market Capitalism 359
  • III. JOINT VENTURES, NETWORKS, AND] CLANS 383
  • III. JOINT VENTURES, NETWORKS, AND] CLANS 385
  • References 407
  • 15: Joint Ventures 410
  • Conclusion 427
  • References 428
  • 16: Organizations: New Concepts for New Forms 429
  • Conclusion 440
  • Notes 441
  • 17: Markets, Bureaucracies, and Clans 442
  • References 456
  • Notes 459
  • References 473
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen
/ 482

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.