TY  - JOUR
AU  - Hart,Oliver D.
TI  - Reference Points and the Theory of the Firm
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13481
PY  - 2007
Y2  - October 2007
UR  - http://www.nber.org/papers/w13481
L1  - http://www.nber.org/papers/w13481.pdf
N1  - Author contact info:
Oliver D. Hart
Department of Economics
Littauer Center 220
Harvard University
Cambridge, MA 02138
Tel: 617/496-3461
Fax: 617-495-7730
E-Mail: ohart@harvard.edu
AB  - In this article I argue that it has been hard to make progress on Coase's theory of the firm agenda because of the difficulty of formalizing haggling costs.  I propose an approach that tries to move things forward using the idea of aggrievement costs, and apply it to the question of whether a transaction should be placed inside a firm (in-house production) or in the market place (outsourcing).
ER  -