Chapter

Further Issues Arising from the Property Rights Approach

Oliver Hart

in Firms, Contracts, and Financial Structure

Published in print October 1995 | ISBN: 9780198288817
Published online November 2003 | e-ISBN: 9780191596353 | DOI: http://dx.doi.org/10.1093/0198288816.003.0004

Series: Clarendon Lectures in Economics

 Further Issues Arising from the Property Rights Approach

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Discusses further issues regarding the property rights approach. It is argued that control over non‐human assets leads to control over human assets, defining authority within the firm. The author also illustrates the idea that changes in control affect not only the incentives of top managers but also those of workers who do not have control rights either before or after the change. The chapter also touches on issues such as the delegation of control within firms, the distinction between residual control and residual income, the role of reputation, investment in physical capital, and the effect that changes in control may have on the incentives of parties to reveal information and cooperate.

Keywords: authority; delegation; investment; physical assets; reputation; residual control; residual income; worker incentives

Chapter.  6906 words. 

Subjects: Financial Markets

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