Transaction Costs Of Exchange Research Articles

Is There Safety in Numbers? Organizing as a Cooperative in the Freelance Economy

Freelance work is becoming increasingly ubiquitous and pervasive across multiple sectors of the economy. Freelancers are especially vulnerable to hazards of opportunism, and lack the protections traditional workers typically enjoy. In the current study, we enquire whether organizing as a cooperative can aid freelancers in overcoming the challenges they face. To address this question, we conduct a single in-depth case study. We selected Magnum Photos, an exclusive freelancer cooperative agency, founded in 1947 to further the interests of its members. We find that the agency adopted a novel organizational cooperative form we entitle entrepreneurial club, in which the members, who are carefully screened and selected, retain individual property and decision rights. This novel form served to mitigate agency problems, facilitate innovation, reduce transaction costs of exchange, and ultimately contributed to changing the established rules of the game in the field of photojournalism. Currently, Magnum is considered to be a flagship organization in the profession, although the exponential increase in size has led to recent organizational changes. Predicated on our analysis, we suggest that organizing as a cooperative along the above espoused parameters is more beneficial for freelancers than following an atomized approach.

Economics within a Pluralist Ethical Tradition

Ethical pluralism is the recognition that multiple ethical frameworks operate in social settings to solve problems of moral hazard. In particular, non-consequentialist considerations of duty and virtue operate to restrain self-interest and lower transaction costs in exchange, such as when asymmetric information exists. Positive economics has tended to rely exclusively on a behavioral model that assumes utility maximization, but this approach fails to give credit to the neglected foundations of duty and virtue. Consequences, duties, and virtues all play a role in sustaining businesses, for example, and in promoting the search for truth within the economic research community. Normative welfare economics can also benefit from understanding vertical and horizontal pluralism.

Transaction Costs of Exchange in Agriculture: A Survey

The concept of transaction cost has been around for more than 75 years. It has been used to explain every economic phenomenon that does not fit with standard neoclassical predictions. It has been applied to so many fields, its definition varying with every application. This paper surveys the literature on transaction costs in general, as well as those that apply transaction costs to agriculture. It focuses on the role of transaction costs in exchange in agriculture, particularly in the context of the household’s decision to engage in market exchange, in both input and output sides. The survey literature finds a confluence of definitions of transaction cost as applied to theoretical and empirical models. Coasian and Williamsonian definitions are used in interpreting fixed transaction costs while neoclassical and trade definitions (i.e., the concept of price band) characterize proportional transaction costs. The prominence of transport cost and the effect of distance and isolation in many of the analyses points to the influence of the new economic geography research stream. Measurement of transaction cost as an ad valorem tax also references the trade concept of transaction cost.

Democratic Changes and Economic Growth

Today it must be admitted that there is no significant connection between the level of development of democratic institutes and the value of economic growth. This conclusion invariably stems from the vast amount of theoretical and empirical studies that have been conducted over the last 50 years. Why have developed democracies become economic leaders? Why is the US economy growing faster than the economy in Angola, but slower than the economy in Botswana? There are still no answers to these seemingly simple questions. In this paper the author attempts to theoretically justify and empirically confirm the link between the democratic changes in countries and their economic growth. This link becomes apparent if we assume that the amount of transaction costs of exchange depends on the level of political and economic freedom. In turn, transaction costs have a significant influence on the effective functioning of the economy. A decrease in costs of exchange speeds up economic growth and an increase in costs slows down growth. This kind of approach enables us to explain the economic successes of democracies, the lagging behind of many countries in Asia and Africa, the historical reasons for the beginning of the industrial revolution in Europe, the speeding up of economic growth in the 18 th -19 th centuries, the rapid development of production in China and many other occurrences.

Reconsidering Money: Monetary Exchange with Additive Transaction Costs

Under the assumption of purely additive transaction costs in exchange, the literature on money has a standard example of direct exchange dominating indirect (monetary) exchange. From here, it is frequently concluded that subadditive costs (e.g., search costs) must be examined in order to explain the institution or origin of money. In contrast, this paper presents an additive transaction costs model in which the mere absence of double coincidences of wants suffices to motivate monetary exchange. Furthermore, it is found that not all commodity monies that are collectively desirable qualify for the core, but that all fiat monies that are collectively desirable will be elements of the core.