The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration

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The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration

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dc.contributor.author Grossman, Sanford J.
dc.contributor.author Hart, Oliver D.
dc.date.accessioned 2010-01-05T16:39:16Z
dc.date.issued 1986
dc.identifier.citation Grossman, Sanford J., and Oliver D. Hart. 1986. The costs and benefits of ownership: A theory of vertical and lateral integration. Journal of Political Economy 94(4): 691-719. en_US
dc.identifier.issn 0022-3808 en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:3450060
dc.description.abstract Our theory of costly contracts emphasizes that contractual rights can be of two types: specific rights and residual rights. When it is costly to list all specific rights over assets in the contract, it may be optimal to let one party purchase all residual rights. Ownership is the purchase of these residual rights. When residual rights are purchased by one party, they are lost by a second party, and this inevitably creates distortions. Firm 1 purchases firm 2 when firm 1's control increases the productivity of its management more than the loss of control decreases the productivity of firm 2's management. en_US
dc.description.sponsorship Economics en_US
dc.language.iso en_US en_US
dc.publisher University of Chicago Press en_US
dc.relation.isversionof doi:10.1086/261404 en_US
dash.license LAA
dc.title The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration en_US
dc.type Journal Article en_US
dc.description.version Version of Record en_US
dc.relation.journal Journal of Political Economy -Chicago- en_US
dash.depositing.author Hart, Oliver D.
dc.date.available 2010-01-05T16:39:16Z

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  • FAS Scholarly Articles [7289]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University

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