Transaction cost economics and the firm
Transaction cost economics and the firm
This chapter continues the discussion of the previous chapter about models of the firm, with consideration given to models where the firm is something more like a market than a consumer. It considers how a transaction placed within the context of a firm is different from the “same” transaction placed within a market, which is the subject of transaction cost economics. In transaction cost economics, the unit of analysis is the individual transaction. In this theory, firms are not entities, things of the rough category of the consumer; instead firms are institutions, in the rough category of the market. The line between firms and markets is rather fuzzy, but what line there is is drawn along the dimension of the frequency of interaction, the relative permanence of certain legal and market relationships, and the extent to which parties to a transaction are “tied” to one another.
Keywords: firms, markets, individual transaction, transaction cost economics, market relationships
Princeton Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
Please, subscribe or login to access full text content.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us.
