The seven essays in this volume break new ground in the theory of the business firm and its applications in economics. A leading analyst of industrial organization, Professor Demsetz first critically examines current debates on the existence, definition, and organization of the firm discussing conceptual and theoretical issues related to the emerging theory of the firm. He then investigates and comments on contemporary treatments of the relation between business ownership, wealth, and economic development.

Subsequent essays offer new perspectives on competition, profit maximization, and rational behavior, and shedding new light on managers' compensation, antitrust policy, and the accuracy of firms' accounting data. The latter themes in particular make the collection of interest to business audiences as well as to professionals and students in economics.

1. These previously unpublished essays derive from lectures originally presented at Uppsala and Lund Universities in Sweden, the Mont Pelerin Society meeting in Prague, and the Center for the Study of Economy and the State at the University of Chicago.