On the Foundations of the Property Rights Theory of the Firm: Cooperative Investments and Message-Dependent Contracts

Arbeitspapier

The property-rights theory assumes that trade is non-contractible ex-ante and focusses exclusively on the allocation of property-rights. We derive foundations for this focus on property-rights by identifying scenarios where only one of the simple ownership structures is optimal even though trade is contractible. In these scenarios it is optimal: (1) not to sign a trade contract; (2a) to sign a partially enforced trade contract; (2b) such a combination of asset ownership and a trade contract might even achieve the first-best. For the purpose of identifying the optimal simple ownership structure, trade contracts can be neclected in scenarios (2a) and (2b).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bonn Econ Discussion Papers ; No. 12/2000

Classification and Topics

• Classification: Wirtschaft ; Organizational Behavior; Transaction Costs; Property Rights ; Asymmetric and Private Information; Mechanism Design ; Transactional Relationships; Contracts and Reputation; Networks ; Firm Organization and Market Structure
• Subject: Incomplete Contracts ; Property Rights ; Specific Investments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Roider, Andreas
• Event: Veröffentlichung
• (who): University of Bonn, Bonn Graduate School of Economics (BGSE)
• (where): Bonn
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/78395
• Last update: 10.03.2025, 11:44 AM CET