Journal Files A.A.S
The cost of producing information is not necessarily an Information Cost/Transaction Cost
Case: Firms in an industry forming an alliance to produce information on best management practices.
Information/knowledge (for example about best management practices used by firms in an industry) has a production cost. E.g. data gathering and analysis (cost of enumerators and computers). This is not an information/transaction cost.
Transaction cost would involve what the buyer and seller of this information would need to know to make the transaction to produce this information. Can the buyer judge/measure the quality of the information that is proposed to be produced? Can the producer measure the effort of the enumerators? The buyer needs to decide if they are going to buy from an outside firm (who in turn contracts with the firms in the industry to be studied) or contract with each other. There is cost of negotiation involved in this decision.
Williamson might inquire whether this information producer has to invest in some special interview skills or equipment which in unique to this study and thus constitute specific assets. An alliance is a hybrid type of structure--neither fully integrated firm or arms length market.
An alliance combines the buyer and the seller with a specialized firm which is supplied some inputs without cost from the buyer
\810\info-cst
If you have any questions or comments, please email schmid@pilot.msu.edu
