The theory of the firm : microeconomics with endogenous enterprises, firms, markets and organizations

The Theory of the Firm presents a path-breaking general framework for understanding the economics of the firm. The book addresses why firms exist, how firms are established, and what contributions firms make to the economy. The book presents a new theoretical analysis of the foundations of microeconomics that makes institutions endogenous. Entrepreneurs play a central economic role by establishing firms. In turn, firms create and operate markets and organizations. The book provides innovative models of economic equilibrium that endogenously determine the structure and function of economic institutions. The book proposes an ''intermediation hypothesis'' - the establishment of firms depends on the effects of transaction costs and on the extent of the market The Theory of the Firm presents a path-breaking general framework for understanding the economics of the firm. The book addresses why firms exist, how firms are established, and what contributions firms make to the economy. The book presents a new theoretical analysis of the foundations of microeconomics that makes institutions endogenous. Entrepreneurs play a central economic role by establishing firms. In turn, firms create and operate markets and organizations. The book provides innovative models of economic equilibrium that endogenously determine the structure and function of economic institutions. The book proposes an 'intermediation hypothesis' - the establishment of firms depends on the effects of transaction costs and on the extent of the market. Read more... Introduction; Part I. The Theory of the Firm: 1. The consumer; 2. The firm; 3. Separation of consumer objectives and firm objectives; Part II. The Entrepreneur in Equilibrium: 4. The entrepreneur; 5. Competition between entrepreneurs; Part III. Human Capital and Financial Capital: 6. Human capital and the organization of the firm; 7. Financial capital and the organization of the firm; Part IV. Intermediation by the Firm: 8. The firm as intermediary in the pure exchange economy; 9. The firm versus free riding; Part V. Market Making by the Firm: 10. The firm creates markets; 11. The firm in the market for contracts; 12. Conclusion Frontmatter......Page 1 Contents......Page 5 Preface and Acknowledgments......Page 9 Introduction......Page 12 PART I - THE THEORY OF THE FIRM......Page 20 1 - The Consumer......Page 22 2 - The Firm......Page 74 3 - The Separation of Consumer Objectives and Firm Objectives......Page 136 PART II - THE ENTREPRENEUR IN EQUILIBRIUM......Page 160 4 - The Entrepreneur......Page 162 5 - Competition among Entrepreneurs......Page 208 PART III - HUMAN CAPITAL, FINANCIAL CAPITAL, AND THE ORGANIZATION OF THE FIRM......Page 240 6 - Human Capital and the Organization of the Firm......Page 242 7 - Financial Capital and the Organization of the Firm......Page 274 PART IV - INTERMEDIATION BY THE FIRM......Page 304 8 - The Firm as Intermediary in the Pure-Exchange Economy......Page 306 9 - The Firm versus Free Riding......Page 340 PART V - MARKET MAKING BY THE FIRM......Page 376 10 - The Firm Creates Markets......Page 378 11 - The Firm in the Market for Contracts......Page 428 12 - Conclusion......Page 469 References......Page 476 Author Index......Page 514 Subject Index......Page 522 This book presents a path-breaking general framework for understanding the economics of the firm. It addresses why firms exist, how firms are established, and what contributions firms make to the economy.--[from book]