Journal File A. Allan Schmid Oct. 9, 2001
Transaction Cost/Interdependence Concept Map (tentative rumination)
Keep these perspectives in mind (from Part I of the course):
1. Cost is a human artifact.
2. Institutions are not factors of production.
3. Transaction is the unit of observation.
13. Transaction Costs/Interdependencies (all are inherent)
Information (HIC) measurement of present.
Uncertainty (future states).
Contractual (function of numbers and complexity)
Asset specificity (interacts with the above commitment problem)/
Rules of thumb provide shared expectations. Can=t process all available info.
Competing visions of what is possible and desirable. Radical uncertainty.
Groups with shared purpose?
16. Institutional Change I
a. Because transaction costs change.
b. Because power shifts.
17. Institutional Change II
AHow to trade at a distance with strangers.@ D. North
25. Markets in general
26. Labor markets and other flocks.
Who hires whom? What are bosses for?
is shaped and adopted in context of the structure of transactions (organizations).
All of these topics are inter-related. Transaction cost is not a special topic.
Does the focus on Acost@ restrict our thinking? If everything is a matter of cost minimization, it is nothing more than production economics? For example, see Ines Macho-Stadler and David Perez, An Introduction to the Economics of Information: Incentives and Contracts, Oxford 2001. This book has problem sets with solutions. In power disputes there is little talk of optimal solutions.
Remember our early reading in the domain of institutional economics contrasting economizing with power questions? Where=s the blood?
Work on your own concept map. What differentiates these topics or holds them together?