Corporate Governance
Intermediate
Residual Control Rights
Rights to decide how assets are used in states of the world not fully specified by contract.
Why It Matters
Residual control rights connect incomplete-contract theory to corporate ownership, firm boundaries, voting rights, and the allocation of authority among investors, managers, and creditors.
Selected Literature
A short list of directly relevant archive entries.
1972
Introductory
Production, Information Costs, and Economic Organization
Armen A. Alchian and Harold Demsetz
American Economic Review
1986
Advanced
The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration
Sanford J. Grossman and Oliver D. Hart
Journal of Political Economy
1990
Advanced
1995
Advanced
Related Cases
1988
Corporate Law
Blasius Industries, Inc. v. Atlas Corp.
564 A.2d 651 (Del. Ch. 1988)
Board action taken for the primary purpose of interfering with shareholder voting power.
1997
Securities Regulation
United States v. O'Hagan
521 U.S. 642 (1997)
Misappropriation theory of insider trading and tender-offer fraud rules.