Schmitz, Patrick W. (2020). Moral hazard and the property rights approach to the theory of the firm. Econ. Lett., 186. LAUSANNE: ELSEVIER SCIENCE SA. ISSN 1873-7374
Full text not available from this repository.Abstract
In the Grossman-Hart-Moore property rights theory, there are no frictions ex post (i.e., after non-contractible investments have been sunk). In contrast, in transaction cost economics ex-post frictions play a central role. We bring the property rights theory closer to transaction cost economics by allowing for ex-post moral hazard. As a consequence, central conclusions of the Grossman-Hart-Moore theory may be overturned. In particular, even though only party A has to make an investment decision, B-ownership can yield higher investment incentives. Moreover, ownership matters even when investments are fully relationship-specific (i.e., when they have no impact on the parties' disagreement payoffs). (C) 2019 The Author. Published by Elsevier B.V.
| Item Type: | Journal Article | ||||||||
| Creators: |
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| URN: | urn:nbn:de:hbz:38-351829 | ||||||||
| DOI: | 10.1016/j.econlet.2019.06.020 | ||||||||
| Journal or Publication Title: | Econ. Lett. | ||||||||
| Volume: | 186 | ||||||||
| Date: | 2020 | ||||||||
| Publisher: | ELSEVIER SCIENCE SA | ||||||||
| Place of Publication: | LAUSANNE | ||||||||
| ISSN: | 1873-7374 | ||||||||
| Language: | English | ||||||||
| Faculty: | Unspecified | ||||||||
| Divisions: | Unspecified | ||||||||
| Subjects: | no entry | ||||||||
| Uncontrolled Keywords: |
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| URI: | http://kups.ub.uni-koeln.de/id/eprint/35182 |
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