Coase's twin towers: the relation between 'The Nature of the Firm' and 'The Problem of Social Cost.' (Ronald Coase)

Article Abstract:

Ronald Coase's two most influential articles, 'The Nature of the Firm' and 'The Problem of Social Cost,' are especially susceptible to criticism by economists with a defined political slant precisely because Coase himself was careful not to rely on a political or economic agenda in his works. The social cost article appeals to economists who believe in atomized markets because it claims that inter-firm planning can be result in more efficient markets than price-regulated decisions. Those who like the social cost article tend to focus on Coase's claim that markets without transaction costs are efficient self-regulators.

Externalities (Economics)

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Irreversibility and the law: the size of firms and other organizations

Article Abstract:

Ronald Coase's theory of the firm assumes that government regulation of firms are not as effective as the free market in determining a firm's arrangement and size. Others claim that laws can be used to create firms of optimum size. A firm's inherent structure makes expansion more beneficial than contracting in most cases, and these expansions are usually irreversible. Once irreversibility is taken into account, it appears that transaction costs imposed by law do not exert as much influence on agency costs as Coase's original theory posits.

Corporate growth, Irreversible processes, Irreversible processes (Thermodynamics)

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Similar abstracts:

• Abstracts: The influence of 'The Nature of the Firm' on the theory of corporate law. Market efficiency and the domain of the firm

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