Partner Uncertainty and the Dynamic Boundary of the Firm

• 成果类型: Article
• 署名作者: Hellmann, Thomas; Thiele, Veikko
• 署名单位: University of Oxford; Queens University - Canada
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20160016
• 发表日期: 2017
• 页码: 277-302
• 关键词: raise divorce rates; vertical integration; incomplete contracts; asset ownership; PROPERTY-RIGHTS; investments; marriage; COSTS; incentives

摘要

We develop a new theory of the dynamic boundary of the firm where asset owners may want to change partners ex post. We identify a fundamental trade-off between (i) a displacement externality under non-integration, where a partner leaves a relationship even though his benefit is worth less than the loss to the displaced partner, and (ii) a retention externality under integration, where a partner inefficiently retains the other. With more asset specificity, displacement externalities matter more and retention externalities less, so that integration becomes more attractive. Wealth can resolve ex post inefficient partner arrangements, but may weaken ex ante incentives for specific investments.