The essays in this volume discuss the theory of the business firm and its applications in economics. A leading analyst of industrial organization, Professor Demsetz first critically examines current debates on the existence, definition, and organization of the firm and discusses conceptual and theoretical issues related to the emerging theory of the firm. He then analyzes contemporary treatments of the relation between business ownership, wealth, and economic development. Subsequent essays offer new perspectives on competition, profit maximization and rational behavior, and shed new light on managers' compensation, antitrust policy, and the accuracy of firms' accounting data. The latter themes will interest business audiences as well as professionals and students in economics. These previously unpublished essays derive from lectures originally presented at Uppsala and Lund Universities in Sweden, the Mont Pelerin Society meeting in Prague, and the Center for the Study of Economics and the State at the University of Chicago.
• Demsetz is a leading analyst of industrial organization with considerable name recognition • Essays are on 'hot' topics in the field, including CEO compensation, accuracy of accounting data, anti-trust policy, etc. • Theoretical assessments are made on important issues such as relationships between model-building and actual firm performance, usefulness of game theory for real world economics, etc.
Preface; First Commentary. The firm in theory: its definition and existence; Second Commentary. Agency and non-agency explanations of the firm's organization; Third Commentary. Enterprise control, wealth, and economic development; Fourth Commentary. Profit maximization and rational behavior; Fifth Commentary. The use and abuse of accounting profit data; Sixth Commentary. Management compensation and tournament theory; Seventh commentary. The intensity and dimensionality of competition; References.
'… a stimulating and challenging collection of essays which will certainly repay careful reading by those concerned with the issues which Demsetz tackles.' D. P. O'Brien, The Economic Journal