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A Team Production Theory Of Corporate Law, Margaret M. Blair, Lynn A. Stout
A Team Production Theory Of Corporate Law, Margaret M. Blair, Lynn A. Stout
Vanderbilt Law School Faculty Publications
Contemporary corporate scholarship generally assumes that the central economic problem addressed by corporation law is getting managers and directors to act as loyal agents for shareholders. We take issue with this approach and argue that the unique legal rules governing publicly-held corporations are instead designed primarily to address a different problem - the "team production" problem - that arises when a number of individuals must invest firm-specific resources to produce a nonseparable output. In such situations team members may find it difficult or impossible to draft explicit contracts distributing the output of their joint efforts, and, as an alternative, might …
Team Production In Business Organizations: An Introduction, Margaret M. Blair, Lynn A. Stout
Team Production In Business Organizations: An Introduction, Margaret M. Blair, Lynn A. Stout
Vanderbilt Law School Faculty Publications
For the past two decades, legal and economic scholarship has tended to assume that the central economic problem addressed by corporation law is getting managers and directors to act as faithful agents for shareholders. There are other important economic problems faced by business firms, however. This article introduces a Symposium that explores one of those alternate economic problems: the problem of "team production". Team production problems can arise whenever three conditions are met: (1) economic production requires the combined inputs of two or more individuals; (2) at least some of these inputs are "team-specific," meaning they have a significantly higher …