In this paper we explain the use of explicit contracts of employment, particularly those that embody high- rather than low-powered incentives and clauses that supersede the common law defaults. Our analysis is based on an understanding of two fundamental problems that arise when agency...

The purpose of this paper is to demonstrate that governance structure and contractual form are two distinct concepts and that they should not be used interchangeably in both theoretical and empirical studies of transaction cost economics. Specifically, the choice of governance structure does not...

This paper contends that there is an important distinction between governance structure and contractual form, and that organizational boundaries, defined by governance structures, need not explain contractual form. The basic idea is that governance refers to the general environments and...