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Discuss factors that determine vertical boundaries of a firm

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Reference no: EM13895915

1. Explain why there is a trade-off between incentive and insurance considerations in a principal-agent relationship between owner and manager with hidden effort.

2. Discuss the factors that determine the vertical boundaries of a firm, that is, the factors behind the ‘make-or-buy decision' of the firm.

Reference no: EM13895915

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