This book brings together classic writings on the economic nature and organization of firms, including works by Ronald Coase, Oliver Williamson, and Michael Jensen and William Meckling, as well as more recent contributions by Paul Milgrom, Bengt Holmstrom, John Roberts, Oliver Hart, Luigi Zingales, and others. Part I explores the general theme of the firm's nature and place in the market economy; Part II addresses the question of which transactions are integrated under a firm's roof and what limits the growth of firms; Part III examines employer-employee relations and the motivation of labor; and Part IV studies the firm's organization from the standpoint of financing and the relationship between owners and managers. The volume also includes a consolidated bibliography of sources cited by these authors and an introductory essay by the editors that surveys the new institutional economics of the firm and issues raised in the anthology.
Reintroducing: The Economic Nature of the Firm by Randall S. Kroszner and Louis Putterman 1
Pt. I Within and among firms: the division of labor
1 From The Wealth of Nations by Adam Smith 35
2 From Capital by Karl Marx 46
3 From Risk, Uncertainty, and Profit by Frank Knight 52
4 From The Modern Corporation and Private Property by Adolf A. Berle, Jr. and Gardiner C. Means 58
5 The use of knowledge in society by Friedrich Hayek 63
6 Corporate governance by Luigi Zingales 69
Pt. II The scope of the firm
7 The nature of the firm by Ronald Coase 79
8 Vertical integration, appropriable rents, and the competitive contracting process by Benjamin Klein and Robert Crawford and Armen Alchian 96
9 The governance of contractual relations by Oliver Williamson 116
10 The limits of firms: incentive and bureaucratic features by Oliver Williamson 127
11 Bargaining costs, influence costs, and the organization of economic activity by Paul Milgrom and John Roberts 143
12 The boundaries of the firm revisited by Bengt Holmstrom and John Roberts 156
Pt. III The employment relation, the human factor, and internal organization
13 Production, information costs, and economic organization by Armen Alchian and Harold Demsetz 173
14 Contested exchange: new microfoundations for the political economy of capitalism by Samuel Bowles and Herbert Gintis 197
15 Understanding the employment relation: the analysis of idiosyncratic exchange by Oliver Williamson and Michael Wachter and Jeffrey Harris 212
16 Multitask principal-agent analyses: incentive contracts, asset ownership, and job design by Bengt Holmstrom and Paul Milgrom
