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Discrete institutional alternatives: Theoretical and policy issues (Celebrating the 80th anniversary of Ronald Coase's "Nature of the Firm")
[journal article]
Abstract This paper addresses the comparative analysis of discrete institutional alternatives in organizing transactions among distinct economic entities. The theoretical framework for understanding this issue was introduced by Ronald Coase 80 years ago. Following this seminal contribution, a standard theore... view more
This paper addresses the comparative analysis of discrete institutional alternatives in organizing transactions among distinct economic entities. The theoretical framework for understanding this issue was introduced by Ronald Coase 80 years ago. Following this seminal contribution, a standard theoretical distinction now exists between the institutionally embedded set of economic exchanges (the transactions) and the institutional settings within which these transactions are organized, firms and markets being the epitomized polar cases. On the normative side, this approach facilitated better understanding of failures and flaws in the organization of numerous transactions and of how to fix them. Three examples are provided to illustrate the issues at stake: contracting on large diameter pipes for PJSC "Gazprom" infrastructure projects, contracting in commercial real estate, and determining governance mechanisms for companies facing significant switching costs in highly concentrated markets.... view less
Classification
Basic Research, General Concepts and History of Economics
Free Keywords
transactions; institutions; discrete institutional alternatives; contracts; market failures
Document language
English
Publication Year
2017
Page/Pages
p. 200-220
Journal
Russian Journal of Economics, 3 (2017) 2
ISSN
2618-7213
Status
Published Version; reviewed
Licence
Creative Commons - Attribution-Noncommercial-No Derivative Works 4.0