Property Rights and the Nature of the Firm

  title={Property Rights and the Nature of the Firm},
  author={O. Hart and J. Moore},
  journal={Journal of Political Economy},
  pages={1119 - 1158}
  • O. Hart, J. Moore
  • Published 1990
  • Business, Economics
  • Journal of Political Economy
  • This paper provides a framework for addressing the question of when transactions should be carried out within a firm and when through the market. Following Grossman and Hart, we identify a firm with the assets that its owners control. We argue that the crucial difference for party 1 between owning a firm (integration) and contracting for a service from another party 2 who owns this firm (nonintegration) is that, under integration, party 1 can selectively fire the workers of the firm (including… CONTINUE READING
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