THE CORPORATION AND THE ECONOMIST

This paper reviews what economists have said about the corporation and economic research on the corporation over the last 200 years. It argues that economists have made less progress in understanding the corporation than they might have due to their unwillingness to adopt a more realistic set of behavioral assumptions about managerial motivation. This point is illustrated by reference to the principal/agent literature and to articles in recent issues of leading industrial organization journals. A richer behavioral foundation for research on the corporation, and in economics more generally, is advocated.