Indirect pricing theory of the firm: A general-equilibrium analysis involving production technology and management service

Guoqiang Li, Yew-Kwang Ng

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Abstract

This paper develops a general-equilibrium model that involves production technology and management service to study the emergence of firms from the perspective of saving transaction costs. Inframarginal analysis is used to formalize Coase and Cheung s theory of the firm and to generalize Yang and Ng s indirect pricing theory of the firm. Not only the emergence of firms, their growth and contraction, but also the relevant conditions for the existence of technology entrepreneurs and professional management are also investigated.
Original languageEnglish
Pages (from-to)129 - 148
Number of pages20
JournalPacific Economic Review
Volume12
Issue number1
Publication statusPublished - 2007

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