IDEAS home Printed from https://ideas.repec.org/p/usi/wpaper/495.html
   My bibliography  Save this paper

Power

Author

Listed:
  • Samuel Bowles
  • Herbert Gintis

Abstract

We consider the exercise of power in competitive markets for goods, labour and credit. We offer a definition of power and show that if contracts are incomplete it may be exercised either in Pareto-improving ways or to the disadvantage of those without power. Contrasting conceptions of power including bargaining power, market power, and consumer sovereignty are considered. Because the exercise of power may alter prices and other aspects of exchanges, abstracting from power may miss essential aspects of an economy. The political aspect of private exchanges challenges conventional ideas about the appropriate roles of market and political competition in ensuring the efficiency and accountability of economic decisions

Suggested Citation

  • Samuel Bowles & Herbert Gintis, 2007. "Power," Department of Economics University of Siena 495, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:495
    as

    Download full text from publisher

    File URL: http://repec.deps.unisi.it/quaderni/495.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chichilnisky, Graciela & Heal, Geoffrey, 1984. "Patterns of power: bargaining and incentives in two-person games," Journal of Public Economics, Elsevier, vol. 23(3), pages 333-349, April.
    2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    3. Lerner, Abba P, 1972. "The Economics and Politics of Consumer Sovereignty," American Economic Review, American Economic Association, vol. 62(2), pages 258-266, May.
    4. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
    5. Lundberg, Shelly & Pollak, Robert A, 1994. "Noncooperative Bargaining Models of Marriage," American Economic Review, American Economic Association, vol. 84(2), pages 132-137, May.
    6. Julio J. Rotemberg, 1993. "Power in Profit‐Maximizing Organizations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 2(2), pages 165-198, June.
    7. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-282, July.
    8. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, vol. 75(1), pages 16-36, March.
    9. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    10. repec:ner:ucllon:http://discovery.ucl.ac.uk/17678/ is not listed on IDEAS
    11. Herbert Gintis & Herbert Gintis, 1976. "The Nature of Labor Exchange and the Theory of Capitalist Production," Review of Radical Political Economics, Union for Radical Political Economics, vol. 8(2), pages 36-54, July.
    12. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    13. Shapley, L. S. & Shubik, Martin, 1954. "A Method for Evaluating the Distribution of Power in a Committee System," American Political Science Review, Cambridge University Press, vol. 48(3), pages 787-792, September.
    14. Bachrach, Peter & Baratz, Morton S., 1962. "Two Faces of Power1," American Political Science Review, Cambridge University Press, vol. 56(4), pages 947-952, December.
    15. Bowles, Samuel & Gintis, Herbert, 1993. "A Political and Economic Case for the Democratic Enterprise," Economics and Philosophy, Cambridge University Press, vol. 9(1), pages 75-100, April.
    16. Durham, Yvonne & Hirshleifer, Jack & Smith, Vernon L., 2008. "The Paradox of Power," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 16, pages 127-137, Elsevier.
    17. L. S. Shapley & Martin Shubik, 1967. "Ownership and the Production Function," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 81(1), pages 88-111.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samuel Bowles & Herbert Gintis, 1993. "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 83-102, Winter.
    2. Banerjee, Swapnendu & Saha, Soumyarup, 2024. "Absolute Power Corrupts Absolutely?: A Political Agency Theoretic Approach," MPRA Paper 121109, University Library of Munich, Germany.
    3. Dow,Gregory K., 2019. "The Labor-Managed Firm," Cambridge Books, Cambridge University Press, number 9781107589650.
    4. Gibbons, Robert, 2005. "Four forma(lizable) theories of the firm?," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 200-245, October.
    5. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    6. Raghuram G. Rajan & Luigi Zingales, 1998. "The Governance of the New Enterprise," CRSP working papers 487, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    7. Burdin, Gabriel & Dughera, Stefano & Landini, Fabio & Belloc, Filippo, 2023. "Contested Transparency: Digital Monitoring Technologies and Worker Voice," GLO Discussion Paper Series 1340, Global Labor Organization (GLO).
    8. Deffains, Bruno & Demougin, Dominique M., 2006. "Governance: Who controls matters," SFB 649 Discussion Papers 2006-053, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    9. Raghuram G. Rajan & Luigi Zingales, 1998. "Power in a Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 387-432.
    10. Dietrich, Diemo & Jindra, Björn, 2010. "Corporate governance in the multinational enterprise: A financial contracting perspective," International Business Review, Elsevier, vol. 19(5), pages 446-456, October.
    11. Brice Corgnet, 2018. "Rac(g)e Against the Machine? Social Incentives When Humans Meet Robots," Post-Print halshs-01984467, HAL.
    12. Belloc, Filippo & Burdin, Gabriel & Cattani, Luca & Ellis, William & Landini, Fabio, 2022. "Coevolution of job automation risk and workplace governance," Research Policy, Elsevier, vol. 51(3).
    13. Jerker Denrell, 2000. "Radical Organization Theory," Rationality and Society, , vol. 12(1), pages 39-66, February.
    14. repec:hum:wpaper:sfb649dp2006-053 is not listed on IDEAS
    15. Bejarano, Hernán & Corgnet, Brice & Gómez-Miñambres, Joaquín, 2021. "Economic stability promotes gift-exchange in the workplace," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 374-398.
    16. Bernard Baudry & Virgile Chassagnon, 2012. "The vertical network organization as a specific governance structure: what are the challenges for incomplete contracts theories and what are the theoretical implications for the boundaries of the (hub," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(2), pages 285-303, May.
    17. Ola Kvaløy & Trond E. Olsen, 2008. "Cooperation in Knowledge-Intensive Firms," Journal of Human Capital, University of Chicago Press, vol. 2(4), pages 410-440.
    18. Kirsten Foss & Nicolai Foss, 2001. "Assets, Attributes and Ownership," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 19-37.
    19. Martin Brown & Armin Falk & Ernst Fehr, "undated". "Contractual Incompleteness and the Nature of Market Interactions," IEW - Working Papers 038, Institute for Empirical Research in Economics - University of Zurich.
    20. Lewis A. Kornhauser & W. Bentley MacLeod, 2012. "Contracts between Legal Persons [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    21. Corgnet, Brice & Hernán-González, Roberto & Mateo, Ricardo, 2023. "Peer effects in an automated world," Labour Economics, Elsevier, vol. 85(C).

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:usi:wpaper:495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fabrizio Becatti (email available below). General contact details of provider: https://edirc.repec.org/data/desieit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.