3) This result follows because the monopolistic supplier of a specialized asset is in a position to capture quasi rents from joint production.
The successive monopoly problem is only one reason firms vertically integrate; Klein, Crawford, and Alchian [1978, 300] explain that the other reason is to avoid "postcontractual opportunistic behavior that occurs when specialized assets and appropriable quasi rents are available.
Ultimately, however, the government as sovereign owner of the park was in a position to redistribute the quasi rents by allowing competing transportation and regulating the prices charged for rail services and tourist facilities.
The discussion then turns to the use of insurance to increase the firm's quasi rents.
Moreover, this article suggests that insuring large casualty losses will enable the firm to exploit more fully the quasi rents associated with the profitable use of its organizational capital.
With decreasing predictability of risks and rising monitoring costs, the insurer faces an increased probability of being deprived of the quasi rents associated with the profitable use of his or her specific information-producing resources.
This discussion begins introducing concepts that lie at the foundation of the transactions cost theory of the firm; concepts such as asset specificity, opportunistic behavior, quasi rents
, residual claimants, and asymmetric information.