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The (De)composition of Firms: Interdependent Preferences of Corporate Actors*

Published online by Cambridge University Press:  20 August 2009

Andreas Nicklisch
Andreas Nicklisch
Affiliation:
Max Planck Institute for Research on Collective Goods, Kurt-Schumacher-Straße 10, 53113 Bonn, Germany, tel.: +49 228 9141679, fax: +49 228 9141655, e-mail: nicklisch@coll.mpg.de.
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Abstract

This article discusses the limitations of the orthodox economic theory of the firm as a nexus of contracts. Various experimental studies have shown that the aggregation of individuals in groups changes behaviour and preferences systematically. This perspective has been formalised by models of interdependent preferences. Based on a prominent approach of interdependent preferences, intention-based preferences, two types of labour contracts, incentive contracts and bonus contracts are analysed. Results are compared with the predictions of the orthodox economic theory.

Keywords

firmsinterdependent preferenceslabour contracts
Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 10 , Issue 2 , June 2009 , pp. 291 - 305
Copyright
Copyright © T.M.C. Asser Press and the Authors 2009

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References

* I gratefully acknowledge the helpful advice of C. Engel, M. Hellwig and C.C. von Weizsäcker.