Opportunism, hold-up and the (contractual) theory of the firm

James H. Love

Research output: Contribution to journalArticlepeer-review


This paper considers the role of opportunism in three contractual theories of the firm: rent-seeking theory, property rights theory, and agency theory. In each case I examine whether it is possible to have a functioning contractual theory of the firm without recourse to opportunism. Without opportunism firms may still exist as a result of issues arising from (incomplete) contracting. Far from posing a problem for the theory of the firm, questioning the role of opportunism and the ubiquity of the hold-up problem helps us understand more about the purpose and functions of contracts which go beyond mere incentive alignment.
Original languageEnglish
Pages (from-to)479-501
Number of pages23
JournalJournal of Institutional and Theoretical Economics
Issue number3
Publication statusPublished - Sept 2010


  • opportunism
  • contractual theories of the firm
  • rent-seeking theory
  • property rights theory
  • agency theory
  • functioning contractual theory


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