Open AccessPraxeology and the firm: a contribution to the Austrian redefinition of the economic organization problem
Author(s) -
Ivan Janković
Publication year - 2006
Publication title -
economic annals/ekonomski anali
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.148
H-Index - 12
eISSN - 1820-7375
pISSN - 0013-3264
DOI - 10.2298/eka0669143j
Subject(s) - coase theorem , austrian school , theory of the firm , transaction cost , rivalry , economics , entrepreneurship , cartel , microeconomics , agency (philosophy) , internalization theory , praxeology , principal–agent problem , industrial organization , information asymmetry , competition (biology) , neoclassical economics , collusion , finance , sociology , ecology , social science , corporate governance , biology
The aim of this paper is to syntetize theory of entrepreneurship of the Austrian School of economics with the contractual theory of the firm. Transaction cost theory of Ronald Coase and his followers holds that the firm is the organization with dominant component of ordering, while market is defined by competition and rivalry. But, market also includes interdependency and cooperation, such as in the case of cartel. Therefore non-competitive forms of economic coordination are not specificity for the firm, and can be observed in the open market as well. Agency theory rejects the notion of the firm as a hierarchy, and it is based on completeness of knowledge and contract. Theory of entrepreneurship and monetary calculation of Austrian School enables us to integrate contractual theory into the theoretical setting characterized by uncertainty, information asymmetry and positive transaction costs