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Economica Coase Lecture: Reference Points and the Theory of the Firm
Author(s) -
HART OLIVER
Publication year - 2008
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.1468-0335.2007.00659.x
Subject(s) - coase theorem , transaction cost , outsourcing , theory of the firm , economics , production (economics) , neoclassical economics , microeconomics , production theory , industrial organization , database transaction , business , marketing , computer science , programming language
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).