This theoretical paper explores the impact of gender diversity on team production. The key assumption is that men derive utility from signaling high ability to female colleagues. The analysis shows that some gender diversity maximizes expected team production if (i) men and women have similar...

We investigate a team production problem where two parties sequentially invest to generate a joint surplus. In this framework, it is possible to implement the first best even if the investment return is highly uncertain. The optimal contract entails a basic dichotomy: it is a simple option...

We consider dynamic team production in the presence of uncertainty. Team members receive interim feedback that depends on both their current effort level and the project's uncertain prospects. In this environment, each member can encourage the others by making them more optimistic about the...

Coase’s theory of the firm has become a familiar tool to analyze the structure and organization of businesses. Such analyses have increasingly focused on property based theories of the firm, including intellectual property. In previous work we have discussed the application of this model to...

Even as advances in information theory over the last quarter century have cast increasing doubt on the proposition that firms successfully maximize profits, the objective of profit maximization continues to be an axiomatic feature of the neoclassical theory of the firm. This paper attempts to...

In the paper the trade-offs among endogenous transaction costs caused by two-sided moral hazard, exogenous monitoring cost, and economies of specialization are specified in a Grossman, Hart, and Moore (GHM) model to absorb Maskin and Tirole's recent critique and Holmstrom and Milgrom's criticism...

This Article maintains that the decision in Burwell v. Hobby Lobby, which referred to the corporation as a legal fiction designed to serve the interests of the people behind it, signals the “death of the firm” as a unit of legal analysis in which business entities are treated as more than...

This paper proposes a different theory of the firm and demonstrates how it can be employed to yield hypotheses about differences in innovation and human resource strategy according to the shareholder/stakeholder and liberal/coordinated market dichotomies. The theory assumes that feasible...

We look at the economic functions of firms, contracts, and markets and characterize the optimal scope of the firm. Governance structures appear as equilibria and are compared in terms of production costs - determined by a tradeoff between standardization and adaptation - and adjustment costs -...