Difference between revisions of "Grossman Hart (1986) - The Costs And Benefits Of Ownership"
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imported>Ed (New page: ==Reference(s)== *Grossman, Sanford J. and Oliver D. Hart (1986), "The Costs and Benefits of Ownership: A Theory of Vertical Integration", Journal of Political Economy, vol.94, pp. 691-719...) |
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==Reference(s)== | ==Reference(s)== | ||
*Grossman, Sanford J. and Oliver D. Hart (1986), "The Costs and Benefits of Ownership: A Theory of Vertical Integration", Journal of Political Economy, vol.94, pp. 691-719. [http://www.edegan.com/pdfs/Grossman%20Hart%20(1986)%20-%20The%20Costs%20and%20Benefits%20of%20Ownership.pdf pdf] | *Grossman, Sanford J. and Oliver D. Hart (1986), "The Costs and Benefits of Ownership: A Theory of Vertical Integration", Journal of Political Economy, vol.94, pp. 691-719. [http://www.edegan.com/pdfs/Grossman%20Hart%20(1986)%20-%20The%20Costs%20and%20Benefits%20of%20Ownership.pdf pdf] | ||
| + | |||
| + | @article{grossman1986costs, | ||
| + | title={The costs and benefits of ownership: A theory of vertical and lateral integration}, | ||
| + | author={Grossman, S.J. and Hart, O.D.}, | ||
| + | journal={The Journal of Political Economy}, | ||
| + | pages={691--719}, | ||
| + | year={1986}, | ||
| + | publisher={JSTOR} | ||
| + | } | ||
==Abstract== | ==Abstract== | ||
Our theory of costly contracts emphasizes that contractual rights can be of two types: specific rights and residual rights. When it is costly to list all specific rights over assets in the contract, it may be optimal to let one party purchase all residual rights. Ownership is the purchase of these residual rights. When residual rights are purchased by one party, they are lost by a second party, and this inevitably creates distortions. Firm 1 purchases firm 2 when firm l's control increases the productivity of its management more than the loss of control decreases the productivity of firm 2's management. | Our theory of costly contracts emphasizes that contractual rights can be of two types: specific rights and residual rights. When it is costly to list all specific rights over assets in the contract, it may be optimal to let one party purchase all residual rights. Ownership is the purchase of these residual rights. When residual rights are purchased by one party, they are lost by a second party, and this inevitably creates distortions. Firm 1 purchases firm 2 when firm l's control increases the productivity of its management more than the loss of control decreases the productivity of firm 2's management. | ||
Revision as of 20:42, 2 December 2011
Reference(s)
- Grossman, Sanford J. and Oliver D. Hart (1986), "The Costs and Benefits of Ownership: A Theory of Vertical Integration", Journal of Political Economy, vol.94, pp. 691-719. pdf
@article{grossman1986costs,
title={The costs and benefits of ownership: A theory of vertical and lateral integration},
author={Grossman, S.J. and Hart, O.D.},
journal={The Journal of Political Economy},
pages={691--719},
year={1986},
publisher={JSTOR}
}
Abstract
Our theory of costly contracts emphasizes that contractual rights can be of two types: specific rights and residual rights. When it is costly to list all specific rights over assets in the contract, it may be optimal to let one party purchase all residual rights. Ownership is the purchase of these residual rights. When residual rights are purchased by one party, they are lost by a second party, and this inevitably creates distortions. Firm 1 purchases firm 2 when firm l's control increases the productivity of its management more than the loss of control decreases the productivity of firm 2's management.
