In his seminal work on fiscal federalism, Oates (1972) addressed the socalled Decentralization Theorem, which states that, if such factors as scale economies and spillovers are left out of consideration, a decentralized system is always more efficient than a centralized system for the supply of...

It has been argued in the literature that limiting the profits of hospitals can be an effective method of maintaining the quality of medical care. The present paper examines this hypothesis using a simple formal model of the health-care market under asymmetric information. It is shown that, in...

This paper attempts to provide a framework for the formal analysis of the institution of voting in a corporation. I assume that there is a market for control, and examine whether corporate democracy is attained through voting by shareholders. It is shown that whether corporate democracy is...

This paper examines whether production efficiency is attained in a capitalistic class economy where complete contracts are not available. It is shown that such an economy often fails to achieve production efficiency.

This paper examines the implication of different enterprise forms -- capitalist firm and consumer cooperative -- for the level of accident risks, assuming informational asymmetry between the firm and the outside trader. Our conclusion is that, in order to reduce accident risks, we should choose...

This paper addresses a joint production model in which individuals may become better off by giving up some profit. The key to this phenomenon is the existence of multiple inefficient equilibria, in which one individual makes an excessive effort and the other individual free-rides on it. In order...

It is often argued that cooperative firms are financially less viable than ivestor-owned firms. From a fundamental point of view, however, this does not seem a fair comparison, since the market for firm ownership is usually only available to investor-owned firms in our economy. This paper...