Firms Gain Competitive Edge by Integrating Vertically, Reducing Costs
The article discusses how businesses decide whether to make products themselves or buy them from others. They look at factors like incomplete contracts, specific assets, and the reliability of information. The researchers believe that firms try to reduce costs and risks by choosing the right way to organize their work. They have found a lot of evidence to support these ideas. Some theories also talk about how bosses and workers have different attitudes towards risk and how this affects their relationship. But these ideas don't add much new information.