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INDIRECT PRICING THEORY OF THE FIRM: A GENERAL-EQUILIBRIUM ANALYSIS INVOLVING PRODUCTION TECHNOLOGY AND MANAGEMENT SERVICE

  1. Guo-qiang Li1,
  2. Yew-Kwang Ng2,*

Article first published online: 6 FEB 2007

DOI: 10.1111/j.1468-0106.2007.00345.x

Issue

Pacific Economic Review

Pacific Economic Review

Volume 12, Issue 1, pages 129–148, February 2007

Additional Information

How to Cite

Li, G.-q. and Ng, Y.-K. (2007), INDIRECT PRICING THEORY OF THE FIRM: A GENERAL-EQUILIBRIUM ANALYSIS INVOLVING PRODUCTION TECHNOLOGY AND MANAGEMENT SERVICE. Pacific Economic Review, 12: 129–148. doi: 10.1111/j.1468-0106.2007.00345.x

Author Information

  1. 1

    University of Macau

  2. 2

    Monash University

* * Address for correspondence: Yew-Kwang Ng, Department of Economics, Monash University, Clayton, Vic. 3168, Australia. Email: kwang.ng@buseco.monash.edu.au. I wish to note that the alphabetical order of authors hides the overwhelmingly major contributions of the first author. We thank the anonymous referees for their valuable comments and suggestions.

Publication History

  1. Issue published online: 6 FEB 2007
  2. Article first published online: 6 FEB 2007

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Abstract.  This paper develops a general-equilibrium model that involves production technology and management service to study the emergence of firms from the perspective of saving transaction costs. Inframarginal analysis is used to formalize Coase and Cheung's theory of the firm and to generalize Yang and Ng's indirect pricing theory of the firm. Not only the emergence of firms, their growth and contraction, but also the relevant conditions for the existence of technology entrepreneurs and professional management are also investigated.

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