
Contents
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5 A Renaissance Instrument to Support Nonprofits: The Sale of Private Chapels in Florentine Churches
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6.1 Firm Behavior in the Nonprofit Sector: A Synthesis 6.1 Firm Behavior in the Nonprofit Sector: A Synthesis
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6.1.1 General Model 6.1.1 General Model
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6.1.2 Altruism Models 6.1.2 Altruism Models
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6.1.3 Physician Cooperative Model 6.1.3 Physician Cooperative Model
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6.1.4 Noncontractible Quality Model 6.1.4 Noncontractible Quality Model
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6.1.5 Firm-Level Predictions of Existing Theories 6.1.5 Firm-Level Predictions of Existing Theories
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Shape of Firm Supply Curve Shape of Firm Supply Curve
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Factor Demand Behavior Factor Demand Behavior
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Firm Size Firm Size
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Quality Quality
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Average Cost Average Cost
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6.2 Industry-Level Predictions of Existing Theories 6.2 Industry-Level Predictions of Existing Theories
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6.3 Empirical Evidence 6.3 Empirical Evidence
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6.3.1 Firm-Level Comparisons 6.3.1 Firm-Level Comparisons
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Shape of Firm Supply Curve Shape of Firm Supply Curve
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Conditional Factor Demand Conditional Factor Demand
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Unconditional Factor Demand Unconditional Factor Demand
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Firm Size Firm Size
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Quality Quality
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Average Cost Average Cost
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6.3.2 Industry-Level Comparisons 6.3.2 Industry-Level Comparisons
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Response To a Positive Demand Shock Response To a Positive Demand Shock
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Response To a Negative (labor) Supply Shock Response To a Negative (labor) Supply Shock
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Response To an Increase in the Tax Rate Response To an Increase in the Tax Rate
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Response To a Reduction in Government Production Response To a Reduction in Government Production
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Prices Prices
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Summary Summary
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6.4 Concluding Remarks 6.4 Concluding Remarks
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References References
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6 Theories of Firm Behavior in the Nonprofit Sector: A Synthesis and Empirical Evaluation
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Published:August 2003
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Abstract
This chapter attempts to synthesize a few of the dominant theories of not-for-profit (NFP) firms into a common framework, and to connect existing empirical literature on NFPs to this common theoretical framework. It is organized as follows. Section 6.1 synthesizes existing theories of NFP behavior into a common empirical framework. The goal is to generate, for each theory, predictions regarding a common set of observable outcomes. Section 6.2 extends existing theories by generating predictions about industry-level behavior in equilibrium under perfect competition. Section 6.3 examines a large number of the existing empirical studies of NFP firms to determine the extent to which they provide evidence, comparing the behavior of NFP and FP firms on outcomes with regard to which existing theories generate different predictions. Section 6.4 concludes that, if forced to choose among existing theories, we would select theories which argue that the distinctive behavior of NFP firms can be explained by the altruistic motives of these firms' principals as most consistent with available evidence.
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