3.2 The Firm as Nexus of Contracts - Readings

Alchian and Demsetz (1972) is the most important to read (and the shortest and most readable), followed by Jensen and Meckling (1976), which, after the first section, gets too lengthy and technical.

The free IO textbook only very briefly covers Alchian and Demsetz (1972) and nexus of contracts theory. It then launches into a very technical example. This book is less useful today than for last class and for next class: