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| Title: | | How does opportunistic behavior influence firm size?  |
| Authors: | | Cordes, Christian Richerson, Peter J. McElreath, Richard Strimling, Pontus |
| Issue Date: | | 2006 |
| Series/Report no.: | | Papers on economics and evolution 0618 |
| Abstract: | | This paper relates firm size and opportunism by showing that, given certain behavioral dispositions of humans, the size of a profit-maximizing firm can be determined by cognitive aspects underlying firm-internal cultural transmission processes. We argue that what firms do better than markets besides economizing on transaction costs is to establish a cooperative regime among its employees that keeps in check opportunism. A model depicts the outstanding role of the entrepreneur or business leader in firm-internal socialization processes and the evolution of corporate cultures. We show that high opportunism-related costs are a reason for keeping firms size small. |
| Subjects: | | Theory of the Firm Transaction Cost Economics Cultural Evolution Opportunism Cooperation |
| JEL: | | D21 D23 D01 M14 C61 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Papers on Economics and Evolution, MPI für Ökonomik
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