Abstract: It is commonly believed incorporated and unincorporated firms can make the same kind of contracts. When productivity increases with the delay between initial inputs and output longer than a proprietor’s lifespan, we demonstrate that, independent of contracting, transactions, information costs, or capital acquisition, a corporation can make complex contracts which avoid paying factor’s current marginal product. A competitive proprietor cannot make such a contract, and has an incentive to incorporate in order to use advanced, delayed technologies efficiently, thus causing growth, and distribute the resulting output as income optimally, causing equally. Proprietorships will use short- and a corporation long-delay technologies.
Friday, November 16, 2018
3:30pm – 5:00pm