NBER Paper Proposes Coasian Stakeholder Theory: Defining Stakeholders by Shutdown Power
sebkrier · x · 2026-11-02
NBER Working Paper 35960 by Matthew J. Higgins, Peter G. Klein, Anita McGahan, and Rob Wuebker uses the Coase theorem to give stakeholder theory a unified transaction-level rule.
The key concept is "shutdown power": an actor qualifies as a Coasian stakeholder if they have the de facto capacity, within the relevant time horizon, to prevent, materially delay, or substantially reduce the expected joint value of a value-creating transaction.
Key points:
- With costless bargaining and enforcement, value-maximizing transactions proceed regardless of who is identified—rights and bargaining positions only affect value capture.
- With positive transaction costs, identification, bargaining, coalition formation, and enforcement can delay, distort, or suppress transactions.
- Six propositions cover how shutdown power is identified and acquired, how complementarity and bargaining conditions shape value capture, how firms reshape stakeholder sets via coalition costs and governance design, and why consolidated opposition can sometimes preserve transactions that fragmented claims would suppress.
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