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Reflections on Coase, Cost, and Efficiency

Reflections on Coase, Cost, and Efficiency Louis De Alessi0 1. Introduction Ronald Coase's insistence that transaction costs matter, 1 abetted by Armen Alchian's insistence that property rights also matter, 2 dramatically altered the landscape of economics. The neoclassical conditions that all rights to the use of resources are fully defined, allocated, privately held, and exchanged at zero transaction costs are no longer taken for granted as working approximations. Instead, they are generally recognized for what they are: characteristics of pure cases that must be related to the state of the world being analysed if they are to yield testable implications applicable to that world. 3 As a result, new fields of study have appeared and the content of many traditional fields is hardly recognizable. Law and Economics 4 and the Economics of Property Rights5 have joined the curriculum. Concurrently, Industrial Organization has been shifting from description and a preoccupation with competitive and monopolistic market structures to the study of the nature and consequences of the contractual arrangements used to organize economic activity, including why firms exist and take different forms. 6 Similarly, research in Economic Development and Economic History has revealed a new awareness of the role played by alternative institutions. 7 And textbooks http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal des Économistes et des Études Humaines de Gruyter

Reflections on Coase, Cost, and Efficiency

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References (15)

Publisher
de Gruyter
Copyright
Copyright © 1998 by the
ISSN
2194-5799
eISSN
2153-1552
DOI
10.1515/jeeh-1998-0102
Publisher site
See Article on Publisher Site

Abstract

Louis De Alessi0 1. Introduction Ronald Coase's insistence that transaction costs matter, 1 abetted by Armen Alchian's insistence that property rights also matter, 2 dramatically altered the landscape of economics. The neoclassical conditions that all rights to the use of resources are fully defined, allocated, privately held, and exchanged at zero transaction costs are no longer taken for granted as working approximations. Instead, they are generally recognized for what they are: characteristics of pure cases that must be related to the state of the world being analysed if they are to yield testable implications applicable to that world. 3 As a result, new fields of study have appeared and the content of many traditional fields is hardly recognizable. Law and Economics 4 and the Economics of Property Rights5 have joined the curriculum. Concurrently, Industrial Organization has been shifting from description and a preoccupation with competitive and monopolistic market structures to the study of the nature and consequences of the contractual arrangements used to organize economic activity, including why firms exist and take different forms. 6 Similarly, research in Economic Development and Economic History has revealed a new awareness of the role played by alternative institutions. 7 And textbooks

Journal

Journal des Économistes et des Études Humaines – de Gruyter

Published: Mar 1, 1998

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