pn: Gibbons.2005.Four formal(izable) theories of the firm(3): incentive system theory

Gibbons.2005.Four formal(izable) theories of the firm.Journal of Economic Behavior & OrganizationVol. 58 (2005) 200–245

ssrn 2004: SSRN-id596864


(3) an “incentive system”theory, which can be discerned in formal models by Holmstrom and Milgrom (1991,1994), Holmstrom and Tirole (1991), and Holmstrom (1999);


Holmstrom, B., Milgrom, P., 1991. Multitask principal-agent analyses: incentive contracts, asset ownership, and job design. Journal of Law, Economics, and Organization 7, 24–52.
Holmstrom, B., Milgrom, P., 1994. The firm as an incentive system. American Economic Review 84, 972–991.

Holmstrom, B., Tirole, J., 1991. Transfer pricing and organizational form. Journal of Law, Economics, and Organization7, 201–228.

Holmstrom, B., 1999. The firm as a subeconomy. Journal of Law, Economics, and Organization 15, 74–102.