Employment Contracts, Finance and the Distribution of Wealth
Given technology, preferences and information, which manner of organizing production will survive in a competitive environment? Is hierarchy with monitors and employees a necessary outcome of efficient contracting, or are there conditions under which other organizational forms (such as partnerships) might be viable? In answering these questions, one must take into account the free entry of agents into the different occupations — for example, entrepreneur, manager, employee, partner — that each type of organization entails; the factors which determine occupational choice also affect the competitive selection of organizational form.
KeywordsEurope Income Assure Expense Librium
Unable to display preview. Download preview PDF.
- Bernanke, B. and Gertler, M. (1989) ‘Agency Costs, New Worth, and Business Fluctuations’, American Economic Review, vol. 79, no. 1, pp.14–31.Google Scholar
- Knight, F. (1929) Risk, Uncertainty and Profit (Boston, Mass.: Houghton Mifflin).Google Scholar
- Light, I.H. (1972) Ethnic Enterprise in America: Business and Welfare among Chinese, Japanese and Blacks (Berkeley: University of California Press).Google Scholar
- Light, I.H. and Bonacich, E. (1988) Immigrant Entrepreneurs (Berkeley: University of California Press).Google Scholar
- Mirrlees, J. (1974) ‘Notes on Welfare Economics, Information, and Uncertainty’, in Balch, M. McFadden, D. and Wu, S.-Y. (eds), Essays on Economic Behaviour under Uncertainty (Amsterdam: North-Holland).Google Scholar
- Newman, A.F. (1992) ‘The Capital Market, Inequality and the Employment Relation’, Columbia University (mimeo).Google Scholar
- Newman, A.F. (1995) ‘Risk-Bearing and “Knightian” Entrepreneurship’, Columbia University (mimeo).Google Scholar
- Williamson, O. (1985) The Economic Institutions of Capitalism (New York: The Free Press).Google Scholar
- Aghion, P. and Bolton, P. (1993) ‘A Trickle-Down Theory of Growth and Development with Debt-Overhang’, LSE and Nuffield College, Oxford (mimeo).Google Scholar
- Legros, P. and Newman, A. (1994) ‘Wealth Effects, Distribution, and the Theory of Organization’ Cornell and Columbia (mimeo).Google Scholar
- Piketty, T. (1992) ‘Imperfect Capital Markets and Persistence of Initial Wealth Inequalities’, working paper LSE/STICERD no. TE/92/255.Google Scholar