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SSRN Electronic Journal
The Vertical Network Organization as a Specific Governance Structure: What are the Challenges for Incomplete Contracts Theories and What are the Theoretical Implications for the Boundaries of the (Hub-) Firm?
Virgile Chassagnon, Bernard Baudry

Paper Summary

The article discusses how incomplete contracts theories analyze firm boundaries, focusing on the vertical network organization (VNO). It looks at how VNO rules affect incentives and coordination within the network, questioning the impact of hold-up concerns and power dynamics. The VNO's economic structure differs from traditional firm definitions, highlighting it as a unique governance structure.

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