scholarly journals Fictions and frictions: Promises, transaction costs and the innovation of network technologies

2019 ◽  
Vol 49 (2) ◽  
pp. 264-277 ◽  
Author(s):  
Udo Pesch ◽  
Georgy Ishmaev
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Cyclical Pattern ◽  
Critical Scrutiny ◽  
Network Technologies

New network technologies are framed as eliminating ‘transaction costs’, a notion first developed in economic theory that now drives the design of market systems. However, the actual promise of the elimination of transaction costs seems unfeasible, because of a cyclical pattern in which network technologies that make that promise create processes of institutionalization that create new forms transaction costs. Nonetheless, the promises legitimize the exemption of innovations of network technologies from critical scrutiny.

Cultural Capital as a Factor of Uncertainty and Transaction Costs

2015 ◽  
Vol 2015 (5) ◽  
pp. 3-21
Author(s):  
Elena Nikishina
Keyword(s):  
Social Capital ◽  
Economic Theory ◽  
Cultural Capital ◽  
Transaction Costs ◽  
Institutional Design ◽  
Bilateral Trade ◽  
Competitive Advantages ◽  
Suggested Approach ◽  
Definition Of ◽  
Reduction Of Uncertainty

The paper deals with the concept of culture and cultural capital in the economic theory. The concept of culture is analyzed through the points of criticism of social capital by R.Solow. The paper suggests a refined definition of culture and cultural capital. Several ways of productive use of cultural capital are described. Among them: through reduction of uncertainty and transaction costs, through use of competitive advantages, based on culture and harmonization of formal and informal rules. The effect of cultural capital on bilateral trade through reduction in uncertainty and transaction costs is tested in the empirical part of the paper. A suggested approach to cultural capital, based on transaction costs theory can be useful for institutional design, and policy-advice, aiming at the increase in competitiveness of society and the efficiency of formal institutions.

La struttura istituzionale della produzione *

1991 ◽  
Vol 9 (3) ◽  
pp. 163-173
Author(s):  
Ronald H. Coase
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Market Economy ◽  
Government Regulation ◽  
Social Cost ◽  
Economic Planning ◽  
Invisible Hand ◽  
Eastern European ◽  
Eastern European Countries ◽  
Wealth Of Nations

Abstract During the two centuries following the publication of Adam Smith’s Wealth of Nations the economists’ main objective has been to improve his analysis and in particular his basic statement that government regulation and economic planning are not necessary for the functioning of an efficient economy, since the price system (the «invisible hand») can successfully coordinate the economy.However, the excessive attention to prices deviated research from other aspects of the economic system. Coase’s effort, through his articles on «The nature of the firm» (1937) and «The problem of social cost» (1960), was to introduce in the traditional economic theory some institutional elements. The contribution of the first article was essentially the introduction into economic analysis of transaction costs. In the second article it was shown that contracting in absence of transaction costs maximizes the wealth, quite apart from the assignment of property rights.The introduction of institutional elements can be very helpful for reforms in Eastern European countries, because market economy can only work through appropriate institutions.

scholarly journals At the Origins of Neo-institutionalism: Ronald Coase

2021 ◽  
Vol 8 (4) ◽  
pp. 6-18
Author(s):  
R. Nureev
Keyword(s):  
Economic Theory ◽  
Environmental Pollution ◽  
Transaction Costs ◽  
Public Good ◽  
Market Economy ◽  
Legal System ◽  
Nobel Laureate ◽  
History Of ◽  
The Relationship ◽  
Comparative Description

The article contains the analysis of the views of the Nobel laureate in economics Ronald Coase (1910–2013) as the founder of neo-institutionalism. it provides a comparative description of the “old” and “new” institutionalism and shows the relationship and difference between neoclassicism and neo‑institutionalism. I analysed in detail the most famous articles of Coase and, first of all, “The Nature of the Firm” and “The Problem of Social Costs”. in these works, Coase showed that in the absence of transaction costs there is no economic novelty for the existence of a firm, in the second — that in the lack of transaction costs the legal system does not matter. With an exact specification of property rights, the market economy itself is able to cope with environmental pollution without resorting to government intervention, adjusting taxes and subsidies. The article shows the history of lighthouses in economic theory. Usually, the lighthouse is listed as a purely public good. Ronald Coase shows that even a public good — like lighthouses —was paid for by shipowners. The last part is devoted to essays on economics and economists.

scholarly journals Market-Based Solutions to Environmental Problems: Discussion

2000 ◽  
Vol 32 (2) ◽  
pp. 259-266 ◽  
Author(s):  
Richard T. Woodward
Keyword(s):  
Water Pollution ◽  
Economic Theory ◽  
Carbon Sequestration ◽  
Surface Water ◽  
Transaction Costs ◽  
Nonpoint Source ◽  
Source Surface ◽  
Risk And Uncertainty ◽  
Surface Water Pollution ◽  
Monitoring And Enforcement

AbstractThere is rapidly growing interest in the use of market-based (MB) instruments in environmental policy. The papers in this session discuss three relatively new areas for such policies: groundwater contamination, nonpoint source surface-water pollution and carbon sequestration. The papers point out the potential for MB policies in these areas, but significant challenges remain. This comment highlights challenges related to five issues: monitoring and enforcement, trading ratios, baselines, transaction costs, and risk and uncertainty. All these issues must be addressed before MB policies can take the full step from economic theory to regulatory reality.

Coase, Ronald H. (1910–)

2018 ◽  
Author(s):  
Brian H. Bix
Keyword(s):  
Economic Theory ◽  
Industrial Organization ◽  
Economic Analysis ◽  
Transaction Costs ◽  
Government Policy ◽  
Real World ◽  
Government Regulation ◽  
Law And Economics ◽  
Economic Analysis Of Law ◽  
Economic Thinking

Coase’s work reshaped the economic analysis of law and government policy, and began the law-and-economics movement. His writings, over the course of decades, have consistently emphasized the importance to clear economic thinking of observing actual practice. While economic theory had often been grounded on abstract models that assumed the absence of any costs for commercial transactions, Coase has shown how recognizing the pervasive presence of frequently substantial transaction costs in the real world requires rethinking established economic ideas about industrial organization and government regulation.

scholarly journals THEORY OF CONTRACTS IN THE LIGHT OF NEW INSTITUTIONAL ECONOMICS. THE SPECIFICITY OF AGRICULTURAL CONTRACTS

2018 ◽  
Vol 17 (4) ◽  
pp. 97-104
Author(s):  
Marzena Lemanowicz
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Transaction Cost ◽  
Institutional Economics ◽  
Agricultural Sector ◽  
Transaction Cost Economics ◽  
New Institutional Economics ◽  
Economic Literature ◽  
Contract Signing

The article reviews Polish and foreign economic literature regarding new institutional economics (NIE) and various research approaches used in the framework of NIE. Particular attention was paid to the economic theory of contracts and the transaction costs, as the limitation of transaction costs is indeed the main stimulus for contract signing. Special attention was given to agricultural contracts and their specificity. The article discusses different theories applied in the analysis of contracts, characterizes contracts according to different criteria, and draws attention to the importance of transaction costs in the theory of contracts. In addition, factors which contribute to these costs have been identified, indicating the necessity of adapting the principles of transaction cost economics to the needs of the agricultural sector.

Sourcing Strategies of Firms

2017 ◽  
pp. 1-16
Author(s):  
Tomasz Serwach
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Incomplete Contracts ◽  
Developed Countries ◽  
Market Failures ◽  
Outward Fdi ◽  
Sourcing Strategies ◽  
Vertical Fdi ◽  
Internalization Advantages ◽  
Theoretical Developments

The purpose of the chapter is to present recent theoretical developments in FDI theories with an emphasis on sourcing strategies of firms. It is stated that economic theory explains the existence of the so called vertical FDI as the result of market failures or transaction costs and incomplete contracts. Firms engage in foreign sourcing due to lower costs or an access to unique resources but that sourcing takes place within firms' boundaries in order to benefit from internalization advantages. Although recent theories have been developed in the context of FDI from developed countries, those new insights can be easily applied to the case of outward FDI from emerging economies as well.

scholarly journals Too expensive to meter: the influence of transaction costs in transportation and communication

2008 ◽  
Vol 366 (1872) ◽  
pp. 2033-2046 ◽  
Author(s):  
David Levinson ◽  
Andrew Odlyzko
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Time Of Day ◽  
Fine Scale ◽  
Ancient History ◽  
The Future ◽  
Recent Developments ◽  
New Construction ◽  
Public Opposition

Technology appears to be making fine-scale charging (as in tolls on roads that depend on time of day or even on current and anticipated levels of congestion) increasingly feasible. Such charging also appears to be increasingly desirable, as traffic on roads continues to grow and costs and public opposition limit new construction. Similar incentives towards fine-scale charging also appear to be operating in communications and other areas, such as electricity usage. Standard economic theory supports such measures and technology is being developed and deployed to implement them. But their spread is not very rapid and their prospects for the future are uncertain. This paper presents a collection of sketches, ranging from ancient history to very recent developments, that illustrate the costs that charging imposes. Some of those costs are explicit (in terms of the monetary costs to users and the costs of implementing the charging mechanisms). Others are implicit, such as the time or the mental processing costs of users. These argue that the case for fine-scale charging is not unambiguous and that in many cases such charging may lead to undesirable outcomes.

Ronald Coase's theory of the firm and the scope of economics

2014 ◽  
Vol 11 (2) ◽  
pp. 245-264 ◽  
Author(s):  
BRIAN J. LOASBY
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Market Failure ◽  
Social Cost ◽  
Theory Of The Firm ◽  
Scarce Resource ◽  
Human Cognition ◽  
Competitive Industry ◽  
Theoretical Innovation ◽  
Use Of Knowledge

Abstract:Ronald Coase's work and its reception illustrate the significance – and the difficulty – of identifying problems and proposing solutions, which provides the theme of this paper. His theoretical innovation was not derived from economics, and seemed irrelevant to contemporary issues of economic theory and policy; only his much later perception of an apparently unrelated problem – the incoherent treatment of social cost as market failure – showed how the concept of transaction costs could illuminate two major areas of economics. The inadequate treatment by economists of the transaction costs of markets is linked to the neglect of processes, and especially the processes of organising the growth and use of knowledge – key concerns of Smith and Marshall. The curious relationship between Coase's explanation of firms and Austin Robinson's analysis of competitive industry leads to a reflection on the scarce resource of human cognition and the role (and fallibility) of institutions.

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.

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