Tag Archives: transaction cost

That idea, that the market ensures that only the most efficient prosper, is a central message of neoliberal ideology, and it has held UK and US governments under its sway since the time of Thatcher and Reagan. But that ideology contains a large and deep internal contradiction, which applies particularly to large firms like Carillion. To see what that contraction is, we need to talk about ordoliberalism and Ronald Coase.Ordoliberalism is widely known as the German version of neoliberalism....

Must-read unless you are really up on transaction cost. As Simon says, companies that win tenders by bidding low have an incentive to cut quality. The question is: is it possible to stop this happening? It’s here that transactions cost economics enters. This perspective began with Ronald Coase’s famous essay, The Nature of the Firm (pdf). Whether we should do a job in-house or through the market depends upon the comparative costs. And, he said, “there is a cost of using the price...

Read the comments, too. Just like most economists, Bitcoin fans overlooked transaction costs.Wolf StreetBitcoin Proves You Cannot Have Your Digital Cake and Eat it Too Nathan McDonald, Sprott Moneyalso The EU is targeting bitcoin anonymity, saying the measure is needed to tackle tax evasion and other crimes. Anonymity of the cryptocurrency holders is a built-in feature that the EU hopes to undermine.The new rules concerning cryptocurrency passed on Friday by the European Parliament and the...

A very simple reason that there may be decreasing returns to scale is transaction costs increasing for a variety of reasons, some of which may not be well explained. Scaling up micro to the macro level risks running into the fallacy of composition since systems operate differently at different scales — as J. M Keynes observed with the paradox of thrift.Information Transfer Economics The replication argument Jason Smith