The Nature of Transaction Costs and Benefits

1988 ◽  
pp. 114-130
Author(s):  
Karl E. Schenk
Keyword(s):  
Transaction Costs ◽  
Costs And Benefits

Irrelevant Externality Angst

2007 ◽  
Vol 19 (1) ◽  
pp. 3-18 ◽  
Author(s):  
David D. Haddock
Keyword(s):  
Public Goods ◽  
Transaction Costs ◽  
Government Intervention ◽  
External Effect ◽  
Costs And Benefits ◽  
Economic Literature ◽  
Marginal Costs ◽  
Form Of Government ◽  
Large Populations

Public goods are perplexing because insuperable transaction costs are encountered when optimization requires comprehensive negotiation among large populations of beneficiaries. Though scrutiny is certainly warranted, private internalization of public goods externalities is common. Even when many parties can freely utilize the good, if most experience a real but marginally irrelevant external effect, private interactions among the few who experience relevant impacts can suitably balance marginal costs and benefits across entire populations. It is impossible to ascertain the desirability or form of government intervention if empirical tasks are neglected on the basis of inconclusive theoretical conjectures. Journal of Economic Literature Classification: D23, D62, D78, H41, K32, P16, Q28

Broadband and Structural Separation from the Perspective of Transaction Cost Economics

2011 ◽  
pp. 73-91
Author(s):  
Hidenori Fuke
Keyword(s):  
Transaction Costs ◽  
Transaction Cost ◽  
Vertical Integration ◽  
Transaction Cost Economics ◽  
Telecommunications Industry ◽  
Costs And Benefits ◽  
Efficient Management ◽  
Balance Analysis ◽  
Broadband Market ◽  
Structural Separation

Conduct regulation and structural separation are often discussed in industrial organisation studies as options to prevent the abuse of market power by vertically integrated firms toward the downstream market. Both the structural separation of NTT and conduct regulation have been discussed in the Japanese telecommunications industry since the introduction of competition in 1985 and the issue is still being discussed, although the industry is going through a transition from POTS (Plain Old Telephone Service) to the broadband internet. Past discussions have been inclined toward elimination of the harmful effects of vertical integration. However, there is a benefit of vertical integration in the sense that it will promote the efficient management of the firm concerned. I will present a new contention that it is important to conclude a balanced analysis of costs and benefits of vertical integration based on transaction cost theory. Structural separation in the broadband market entails significant transaction costs between a carrier with access facilities and firms offering broadband services by renting these facilities as input. These kinds of transaction costs are comparatively negligible in POTS. I will make it clear that the balance analysis of costs and benefits of structural separation has become more important in broadband than in POTS based on the actual differences in network structure.

scholarly journals Coase’s Transactional Principle in The Light of System Economic Theory

2021 ◽  
Vol 13 (3) ◽  
pp. 006-019
Author(s):  
Georgе B. Kleiner ◽  
◽  
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Optimal Level ◽  
Stable Complex ◽  
Internal Space ◽  
Optimal Size ◽  
Costs And Benefits ◽  
New Approach ◽  
Economic Interaction ◽  
Internal Costs

The problem of optimization of transaction costs is investigated in the article from system economic theory. The concept of a transaction is interpreted as an interaction that affects the products’ seller and the products’ buyer and the immediate system environment of each of them. The representation of such an environment in the form of a tetrad, which is a relatively stable complex of four basic subsystems of object, project, process, and environmental types, makes it possible to trace the consequences of the transaction impulse in the economic zone of the seller and the buyer. Based on the systemic expansion of the concept of transaction, we analyze the transaction costs and benefits arising from the transaction in all four subsystems of the internal space of the firm and its immediate external environment. When formulating the modified Coase’s transactional principle, which determines the optimal size of a firm depending on the ratio between transactional (external) and administrative (internal) costs, we take into account the change in the firm’s “effect of influence” on the immediate environment as boundaries of the firm expand. Considering the “effect of influence” becomes especially important in the context of the growing development of the ecosystem form of organizing economic interaction, characterized by an increased density and tightness of intersubjective relations within the ecosystem. Attention is drawn to the positive aspects of “institutional friction” in the economy, which allows a new approach to determining the optimal level of transaction costs. The expediency of considering the “double tetrad” as a combination of the seller’s tetrad and the buyer’s tetrad as a system unit of market analysis is substantiated.

The NIMBY problem

2021 ◽  
pp. 095162982110448
Author(s):  
David Foster ◽  
Joseph Warren
Keyword(s):  
Transaction Costs ◽  
Formal Model ◽  
Development Projects ◽  
Costs And Benefits ◽  
Policy Reforms ◽  
Local Support ◽  
Local Decision ◽  
Local Residents ◽  
Local Decision Making ◽  
The Relationship

Nimbyism is widely thought to arise from an inherent tradeoff between localism and efficiency in government: because many development projects have spatially concentrated costs and diffuse benefits, local residents naturally oppose proposed projects. But why cannot project developers (with large potential profits) compensate local residents? We argue that local regulatory institutions effectively require developers to expend resources that cannot be used to compensate residents. Not being compensated for local costs, residents therefore oppose development. Using a formal model, we show that when these transaction costs are high, voters consistently oppose development regardless of compensation from developers. But when transaction costs are low, developers provide compensation to residents and local support for development increases. We conclude that nimbyism arises from a bargaining problem between developers and local residents, not the relationship between local decision-making and the spatial structure of costs and benefits. We suggest policy reforms implied by this theory.

Slavery and Supervision in Comparative Perspective: A Model

1984 ◽  
Vol 44 (3) ◽  
pp. 635-668 ◽  
Author(s):  
Stefano Fenoaltea
Keyword(s):  
Transaction Costs ◽  
New World ◽  
The Other ◽  
Comparative Perspective ◽  
Costs And Benefits ◽  
Free Labor ◽  
Wage Work ◽  
Unfree Labor ◽  
The One ◽  
Bonuses And Penalties

The familiar transaction-costs model is extended to allow for the varying costs and benefits of supervision and pain incentives on the one hand, and ordinary rewards on the other, in differentially effort- and care-intensive activities. Applied to unfree labor, this model accounts for the observed patterns of slave governance and manumission in extractive, industrial, agricultural, and service activities in antiquity and in the New World. Applied to free labor, it accounts for wage work on large estates in labor-surplus medieval England or modern Italy, the choice between bonuses and penalties in industrial contracts, and the growing paternalism of our own time.

Using the research on intergroup conflict in nonhuman animals to help inform patterns of human intergroup conflict

2019 ◽  
Vol 42 ◽  
Author(s):  
Amanda R. Ridley ◽  
Melanie O. Mirville
Keyword(s):  
Large Body ◽  
Nonhuman Animal ◽  
Intergroup Conflict ◽  
Costs And Benefits ◽  
Animal Groups ◽  
Interesting Article ◽  
Nonhuman Animals

Abstract There is a large body of research on conflict in nonhuman animal groups that measures the costs and benefits of intergroup conflict, and we suggest that much of this evidence is missing from De Dreu and Gross's interesting article. It is a shame this work has been missed, because it provides evidence for interesting ideas put forward in the article.

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