Working Paper: NBER ID: w13481
Authors: Oliver D. Hart
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).
Keywords: No keywords provided
JEL Codes: D23; D86; K12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| aggrievement costs (K41) | organizational form (L22) |
| organizational structure (firm vs. market) (L10) | efficiency (D61) |
| organizational form (employment vs. independent contracting) (M55) | aggrievement costs (K41) |
| timing of price determination (D41) | performance shading (H21) |
| performance shading (H21) | deadweight loss (H21) |
| specifying a price in advance (P22) | aggrievement (J52) |