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The Coasean way to deal with the cooperation failure that is implicit in Pareto inefficiency is to remove or lessen the obstacles to cooperation through the attribution of property rights and the elimination or reduction of transaction costs. The relevance of this approach is however undermined...
Persistent link: https://www.econbiz.de/10005560990
A firm may allow customers to learn the value of its product prior to buying it. This increases their willingness to pay, even though it also leads some not to buy. That strategy may also be used as a competitive tool to increase its product's attractiveness. This paper examines competition...
Persistent link: https://www.econbiz.de/10005118644
This paper explores potential channels through which information technology (IT) affects economic development. The channel emphasized here is the reduction of transaction costs through the use of information technology. We discuss the nature of transaction costs, their possible impacts on...
Persistent link: https://www.econbiz.de/10005118690
A taxonomy of underground economies is elaborated based on the new institutional approach to economic development. Members of formal sectors confront different sets of transformation and transaction costs than do members of informal sectors and these differences are regarded as crucial to the...
Persistent link: https://www.econbiz.de/10005118816
This paper examines why some transitions are more successful than others by focusing attention on the role of productive, protective and predatory behaviors from the perspective of the new institutional economics. Many transition economies are characterized by a fundamental inconsistency between...
Persistent link: https://www.econbiz.de/10005062456
The theory of asset pricing, which takes its roots in the Arrow-Debreu model (Theory of value [1959, chap. 7]), the Black and Sholes formula (1973) and Cox and Ross (1976 a and b), has been formalized in a general framework by Harrison and Kreps (1979), Harrison and Pliska (1979) and Kreps...
Persistent link: https://www.econbiz.de/10005076947
When more than one component or activity is needed to produce the final product, a firm may use proprietary standards or adopt a common standard to integrate these components. We call these closed and open firms respectively, and develop a model of industry evolution to study the process by...
Persistent link: https://www.econbiz.de/10005561444
This paper analyzes optimal pricing for information goods under incomplete information, when both unlimited-usage (fixed-fee) pricing and usage-based pricing are feasible, and administering usage-based pricing may involve transaction costs. It is shown that offering fixed- fee pricing in...
Persistent link: https://www.econbiz.de/10005561446
Wine brokers are wholesale intermediaries. They belong to the category of the matchmaker intermediaries. These middlemen are not well known. Their role is to help buyers and sellers of bulk wine to meet and transact. Assuming that wine merchants appeal to brokers because they reduce transaction...
Persistent link: https://www.econbiz.de/10005561471
In this paper, we start by considering market models with fixed costs; in such a context, we characterize the absence of arbitrage opportunity and we provide pricing rules. We then apply these results to extend some classical interest rate and option pricing models. In particular, we prove that...
Persistent link: https://www.econbiz.de/10005561650