Abstract
Basically, the process of production can be organized in two ways. In the first, you might enter into a contractual agreement with one person to grow wheat on your land, with another to harvest it, with a third to store it, and with a fourth to sell it. This method of organizing production is called contracting across markets. You negotiate a separate agreement with contractual partners and pay each of them an agreed-upon sum of money in exchange for a specific performance.
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Suggested Readings
Alchian, A. and Demsetz, H. “Production, Information Costs and Economic Organization,” American Economic Review, 62, 1972.
Alchian, A. and Woodward, S. “The Firm is Dead: Long Live the Firm,” Journal of Economic Literature, 26, 1988.
Easterbrook, F. and Fischel, D. “Corporate Control Transactions,” Yale Law Journal, 91, 1982.
Jensen, M. and Meckling, W. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,” Journal of Financial Economics, 3, 1976.
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© 1990 Kluwer Academic Publishers
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(1990). The Right of Ownership and the Firm. In: The Economics of Property Rights: Towards a Theory of Comparative Systems. International Studies in Economics and Econometrics, vol 22. Springer, Dordrecht. https://doi.org/10.1007/978-0-585-28557-3_7
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DOI: https://doi.org/10.1007/978-0-585-28557-3_7
Publisher Name: Springer, Dordrecht
Print ISBN: 978-0-7923-0878-2
Online ISBN: 978-0-585-28557-3
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