The Theory of the Firm

'Daniel Spulber has produced nothing less than a magisterial work. His treatment of firm formation and the role of entrepreneurs in economic activity makes it a certainty that introductory texts in economics will have to be rewritten to accommodate the importance of his work and insight. For the first time, Schumpeter's work has been expanded and settled within the context of modern economics such that the transformation of our economy toward entrepreneurial capitalism has a new and profoundly well-reasoned theoretical basis.' Carl J. Schramm, President, Ewing Marion Kauffman Foundation 'To say that Daniel Spulber's The Theory of the Firm is encyclopedic of everything we know about the business firm would be to sell it short. It is vastly more than a compilation and explanation of the best of extant theory, though it is that; it is also a synthesis of all this information with a new structural approach to theory that will undoubtedly guide research for years to come. Out of this comprehensive treatise on the nature, functioning, and history of the business firm comes an entirely new way of looking at this enormously complex subject. This is a work of scale, scope, wisdom, integration, and analysis such as we rarely see in business scholarship. The business firm has found its Boswell, its Britannica, its Lamarck, and maybe its Einstein.' Henry G. Manne, Dean Emeritus, George Mason University School of Law 'In The Theory of the Firm, Dan Spulber achieves an astonishingly broad and deep contribution to economics that goes beyond the topic in the title. This path-breaking work is a required read for anyone truly interested in economics and finance.' Michael C. Jensen, Professor of Business Administration Emeritus, Harvard Business School 'Daniel Spulber has written an innovative and important book that takes seriously the creation of firms and other institutions by emphasizing the multiple roles of individuals as consumers, workers, and particularly entrepreneurs. Entrepreneurs create firms when they can reduce transactions costs that impede direct exchange between consumers and factor suppliers. In doing so, firms create and manage markets and organizations. The book introduces a series of separation theorems that help to explain the economic role of the firm. The book provides novel mathematical models that address the firm's economic contributions. I highly recommend the book to economists and others with an interest in economic institutions and the organization of economic activity.' David P. Baron, Professor of Political Economy and Strategy, Emeritus, Stanford University 'This important book revolutionizes our knowledge and understanding of entrepreneurship. Dan Spulber breaks important new ground in laying out a coherent and compelling theory of entrepreneurship that is sure to impact all scholars and policy makers focusing on entrepreneurship and innovation.' David B. Audretsch, Director, Max Planck Institute of Economics and Distinguished Professor, Indiana University