October 2009 -- During the last half-century transaction cost became a prominent consideration in
discussions about externalities and ownership arrangements. The author of this essay
contributed to this development in the earlier part of this half-century but has since come
to doubt the importance of transaction cost and even the roles it is thought to play in
these two areas of economic thought. A succinct statement of this doubt as it pertains to
the externality problem is a primary task of this essay. The last part of the essay
questions the dominant position given to transaction cost in discussions of ownership
forms that now go by the names of commons, anti-commons, and gridlocks.
Citation
"On Being Misled by Transaction Cost Economics: Externalities, Commons, and Gridlocks" by Harold Demsetz, October 2, 2009, Quick Links: Gridlock Economy Conference
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