Span of control, transaction costs, and the structure of production chains

Tomoo Kikuchi; Kazuo Nishimura; John Stachurski

doi:10.3982/TE2376

Span of control, transaction costs, and the structure of production chains

Tomoo Kikuchi, Kazuo Nishimura, John Stachurski

Research output: Contribution to journal › Article › peer-review

15 Citations (Scopus)

Abstract

This paper builds coordination costs, transaction costs, and other aspects of the theory of the firm into a production chain model with an infinite number of ex ante identical producers. The equilibrium determines prices, allocations of productive tasks across firms, firm sizes, and the number of active firms. These prices and allocations match several stylized facts on firm boundaries, vertical integration, and division of the value chain.

Original language	English
Pages (from-to)	729-760
Number of pages	32
Journal	Theoretical Economics
Volume	13
Issue number	2
DOIs	https://doi.org/10.3982/TE2376
Publication status	Published - May 2018

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Span of control, transaction costs, and the structure of production chains

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