Economica Coase Lecture: Reference Points and the Theory of the Firm

8 Pages Posted: 17 Jul 2008

See all articles by Oliver Hart

Oliver Hart

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Abstract

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).

Suggested Citation

Hart, Oliver D., Economica Coase Lecture: Reference Points and the Theory of the Firm. Economica, Vol. 75, Issue 299, pp. 404-411, August 2008, Available at SSRN: https://ssrn.com/abstract=1161932 or http://dx.doi.org/10.1111/j.1468-0335.2007.00659.x

Oliver D. Hart (Contact Author)

Harvard University - Department of Economics ( email )

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European Corporate Governance Institute (ECGI) ( email )

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