The Social Contract of the Firm

Preface.- Acknowledgements.- 1. An Overview of the Theory: Hierarchies, Social Contract and Reputation: Introduction; The Firm as Hierarchy; Abuse of Authority; Codes of Ethics; The Constitutional Contract of the Firm; A Parameter for Reputation Effects; Code of Ethics, Rationality and 'Fuzzy Reputation'.- 2.Economic Theory and the Social Contract of the Firm: Theory of Property Rights and Control on the Firm; Constitutional Contract of the Firm and the Theory of Justice; Economic Constitution, Ownership, Compensation.- 3. Games of Reputation and Compliance with the Social Contract: The Compliance Problem; Approaches to the Compliance Problem; Strategic Rationality and Endogenous Sanction of Contractual Commitments; Eyplicitly Modelled Reputation Effects; The Repeated Game between One Long-run Player... and an Infinite Series of Short-run Players; Foundational Problems.- 4. How Far Does Reputation Extend? Abuse of Authority and Corporate Culture: Contexts of Transaction and the Scope of 'Reputation'; Reputation and Hierarchical Transactions; Unforeseen Contingencies; Corporate Culture as a Basis for Reputation Effects; Corporate Culture and 'Focal Points'. A Critical Examination; Explicit General Rules VS. Contextual Focal Points; Moral Language; 5. Information, Incomplete Contracts and the Ethical Code; Default Rules and Contracts; Default Rules and Corporate Ethical Code; Default Rules and Contracts; Default Rules and Corporate Ethical Code; Complete and Incomplete Contracts and Information; The Logic of Incomplete Knowledge and Limited Reasoning; Explicit Contracts, Implicit Rules and Ethical Code; Vagueness VS. Precision; 6. Dealing with Vagueness of Norms: the Theory of Fuzzy Sets: Introduction; Definition of Elementary Fuzzy Concepts; Fuzzy Sets and Possibility; Unforeseen Contingencies and Vagueness; Moral Code and Vagueness; Limitations of this Way of Dealing with Vagueness; 7. A Game Theoretic Model of Incomplete Contract and Ethical Code: The Hierarchical Transaction as a Game; - A Hierarchical Transaction; - The Game in Extended Form: the Moves of Player A; - The Moves of Nature; - The Moves of Player B; - Payoffs in the Case of Foreseeable States; The game in the Presence of Unforeseen Events and Vague Knowledge; Incomplete Contract and Ethical Code; ' Mute' Contractual Rules VS. 'Vague' Moral Principles; 8. Ethical Decision-making Procedure: Vagueness, Default Reasoning and Reputation: Vagueness and Application of the Constitutional Principle (the First Step in the Ethical Procedure); The Second Step in the Ethical Procedure: Fuzzy Measures of Surplus and Effort; Vagueness of Efficient/Fair Outcomes: the Third Step in the Ethical Procedure; Default Deduction of Admissible Actions (the Fourth Step in the Ethical Procedure); Back to Reputation Effects; Reputation in Unforeseen States of the World; Limitations and Final Remarks; References.- Names Index.-