Economic history suggests that technological innovations with long productivity delays contributed to the emergence of corporations. We develop a theory, with supporting evidence, explaining why in a competitive economy proprietors chose to incorporate, because of the difference in the contracts...

The conventional view of the firm cannot explain several important facts. We propose a new hypothesis that a corporation can adopt more advanced, delayed technologies, produce output more efficiently, and distribute it more optimally than a proprietorship or partnership, independent of...

When advanced technologies increase productivity as delays between inputs and output in-crease, a new reason for the existence of corporations appears. A corporation, like government, is potentially deathless and can rationally adopt technological advances with output delays longer than a...

Gray and Benassy analysed the optimal wage indexation choice for representative agents and labor unions when monetary or/and real shocks are generated by a symmetric distribution. Here their analysis is extended to the more relevant choice for firm owners. In general, the probability of...