How do Ford and the supplier know that the other will not go bust, or if the other is an opportunist? ... The principle-agent problem reveals that owners want to profit- maximize but managers want to revenue-maximize to increase their salaries. ... as giving the owner the residual control rights over the use of the firma#39;s non- human assetsa (Bolton and Scharfstein 1998, p.98). Referring back to the Ford Mustang example, the property rights approach advises the supplier to vertically integrateanbsp;...
|Title||:||Microeconomics: Undergraduate Essays and Revision Notes|