# Theory of the firm

`kaal:entity:theory-of-the-firm`

**Status.** derived

This node is assembled mechanically from the 5 claims that carry the concept tag `theory-of-the-firm`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

5 claims across 3 works, 2018 to 2025.

**2018**

- [3249860-004](https://wulfkaal.github.io/claims/3249860-004) [mechanism/argued] -- Decentralized solutions can challenge the basic assumptions of the theory of the firm, because the role of the firm changes if decentralized technology lowers the cost of using markets exponentially.
  > Decentralized solutions for human interaction can challenge the basic assumptions of the theory of the firm. In other words, the role of the firm may change if decentralized solutions help lower the cost of using markets exponentially.
  Wulf A. Kaal, Crypto Economics - The Top 100 Token Models Compared (2018). SSRN: https://ssrn.com/abstract=3249860

**2019**

- [3441904-001](https://wulfkaal.github.io/claims/3441904-001) [failure/argued] *(failure mode)* -- The core underlying agency problems of corporate governance cannot be fully resolved within the existing theoretical and legal infrastructure, despite decades of governance experiments and extensive rule revisions.
  > Despite decades of governance experiments and extensive rule revisions, the existing scope of agency problems suggest that the core underlying agency problems cannot fully be resolved within the existing theoretical and legal infrastructure.
  Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904
- [3441904-011](https://wulfkaal.github.io/claims/3441904-011) [mechanism/argued] -- Inexpensive open source smart contracts eliminate a major motivation for creating a firm under Coase's transaction cost theory, because they enable trustworthy transactions of any size with minimal transaction cost and high transaction security.
  > Inexpensive open-source smart contracts eliminate a major motivation for creating a firm under Ronald Coase's transaction cost theory.
  Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904
- [3441904-012](https://wulfkaal.github.io/claims/3441904-012) [mechanism/argued] -- Barzel's rationale for the firm, the added efficiency of a centralized production monitoring agency, becomes largely irrelevant under efficient smart contracting, because the smart contract performs the production monitoring function and largely removes agents.
  > is also largely irrelevant with efficient smart contracting as the smart contract performs the production-monitoring function and largely removes agents.
  Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904

**2025**

- [5886442-027](https://wulfkaal.github.io/claims/5886442-027) [definitional/argued] -- When all five drivers of positive transaction costs approach zero at once, transaction costs themselves asymptotically approach zero, a point the author names the Coasean Singularity: the point at which the rationale for the firm, for hierarchical governance, for relational contracting and for most formal institutions disappears.
  > When all five drivers of positive transaction costs approach zero simultaneously, transaction costs themselves asymptotically approach zero. This is what I have termed the Coasean Singularity herein, that is, the point at which the very rationale for the firm
  Wulf A. Kaal, The AI-to-AI Economy and the Collapse of Anthropocentric Economic Theory (2025). SSRN: https://ssrn.com/abstract=5886442

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/theory-of-the-firm.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.