Bibliographic Citation
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Title | Vertical integration, appropriable rents, and the competitive contracting process |
Creator/Author | Klein, B. (Univ. of California, Los Angeles) ; Crawford, R.G. ; Alchian, A.A. |
Publication Date | 1978 Oct 01 |
OSTI Identifier | OSTI ID: 6411516 |
Other Number(s) | CODEN: JLLEA |
Resource Type | Journal Article |
Resource Relation | J. Law Econ. ; Vol/Issue: 21:2 |
Subject | 290200 -- Energy Planning & Policy-- Economics & Sociology; ;VERTICAL INTEGRATION-- ECONOMIC ANALYSIS; BEHAVIOR;COMPARATIVE EVALUATIONS;COMPETITION;CONTRACTS;COST;LEASING;MARKET;OWNERSHIP;RISK ASSESSMENT |
Related Subject | ECONOMICS |
Description/Abstract | The potential of post-contractural apportunistic behavior for improving market efficiency through intrafirm rather than interfirm transactions is examined under the assumption that vertical costs will increase less than contracting costs as specialized assets and appropriable quasi rents increase.^Vertical integration protects against the risk of contract cancellation and can create market power which is not generally referred to as monopoly.^Contracts used as a alternative provide economically enforceable protection against opportunistic behavior.^Solutions to opportunistic behavior problems can include joint ownership of common assets and condominium ownership of services.^Economies of scale are major factors in some businesses, such as insurance.^The complexities of ownership relations makes it difficult to assign higher costs to either the contract or vertical-integration approach.^This suggests that economic analysis should be used to identify which is most advantageous for specific kinds of activities. |
Country of Publication | United States |
Language | English |
Format | Pages: 297-326 |
System Entry Date | 2001 May 13 |
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