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