Incomplete Contingent Labor Contract, Asymmetric Residual Rights and Authority, and the Theory of the Firm
Yang, Xiaokai
10.4225/03/5938acde18061
https://bridges.monash.edu/articles/journal_contribution/Incomplete_Contingent_Labor_Contract_Asymmetric_Residual_Rights_and_Authority_and_the_Theory_of_the_Firm/5090320
In the paper the trade-offs among endogenous transaction costs caused by two-sided moral hazard, exogenous monitoring cost, and economies of specialization are specified in a Grossman, Hart and Moore (GHM) model to absorb Maskin and Tirole's recent critique and Holmstrom and Milgrom's criticism of the model of incomplete contract. The extended GHM model allowing incomplete contingent labor contract as well as complete contingent trade contract of goods is used to explore the implications of structure of ownership and residual rights for the equilibrium network size of division of labor and productivity.
2017-06-08 01:48:12
1959.1/36442
Specialization
Asymmetric residual rights
Theory of the firm
Asymmetric authority
Transaction cost
Division of labor
2000
monash:7022
Two-sided moral hazard
Incomplete labor contract