Austrian insights and the theory of the firm

Abstract

The theory of the firm, and more broadly of economic organization, has been one of the most rapidly expanding areas of research in economics in the last decade. It has also been one of the most prestigious to work in, and most of the younger, top theorists in mainstream economics have contributed to it. A theory of the firm is now generally understood as a theory that addresses at least one (and preferably all three) of the following issues (cf. Holmstr6m and Tirole 1989):

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