Being and Time: On the Nature and the Evolution of Institutions

The process that drove the early evolution of hominid culture was an arms race that led to selection for 'big brains,' higher consciousness, and language. Culture was a constraining force on this arms race. 'Big brains,' higher consciousness and language paved the way for the evolution of theory of mind and lower rates of time preference, two keys to the development of complex culture. Culture is a shared mental construct, a form of shared social intentionality with a deeply abstract and symbolic nature. Our symbolic ability enabled the development of this public good, which included such mental constructs as promises, obligations, contracts, marriages, property, money, agency, and government. Cultural institutions change the way we think because they both reduce the cost of cognition and become a substitute for cognition by forming a framework for social habits and routines and that allows for specialization in cognition over space and time; in a fundamental and often unrecognized way, they reduce transactions costs. Perception—including social perception—is an ill-posed problem. Culture provides background assumptions and constraints which allow us to solve this problem and thereby reduce transactions costs.     

Risk preferences and transaction costs

Kahneman and Tversky have collected evidence of behavior in the face of risk which is seemingly at odds with von Neumann-Morgenstern expected utility theory. To account for their observations they propose a new approach which they christen ‘Prospect Theory’. This note argues that introducing transactions costs into expected utility theory systematically accounts for many empirical results without unduly straining the conventional analysis. It may therefore be premature to abandon expected utility theory.     

Did Open Access Integrate Natural Gas Markets? An Arbitrage Cost Approach

Several studies, using analyses that measure the correlation between prices in various markets, have argued that deregulation of natural gas pipeline contracts has reduced the transaction costs between natural gas markets. Correlations approaches, however, have potentially serious problems. Given these problems, this article estimates transactions costs directly. Deregulation is found to have lowered transactions costs to and from the Louisiana, Oklahoma, and Texas regions, but increased transactions costs from the Rocky Mountain area. Deregulation of pipeline contracts, by lowering the cost of using the market and therefore increasing demand for pipeline capacity, may therefore have differential impacts upon transactions costs between markets. This study implies that the transactions cost approach may be able to overcome several difficulties inherent in the correlations approach.     

The law of one price revisited: How do goods market frictions generate large and volatile price deviations?

This paper analyzes the role of goods market frictions in accounting for the large and volatile deviations from the Law of One Price (LOP) in a framework of flexible prices. We draw a distinction between the goods market frictions that are required to consume tradable goods (e.g., distribution costs) and those that are necessary for international transactions (e.g., trade costs). We find that trade costs generate LOP deviations by introducing a no-arbitrage band, while distribution costs cause the price to deviate from the LOP by affecting the probability that trade will occur, given the band. We then conduct a Monte Carlo simulation to show that real exchange rate volatility is positively associated with trade costs, but negatively related to distribution costs. This effect depends on the interplay of trade costs and distribution costs, as they work in opposite directions when creating arbitrage opportunities.     

The Disunity of Unanimity

Unanimity is the optimal voting rule in a world of zero transactions costs, when side payments are impossible. When side payments are available and transactions costs are zero, the voting rule is irrelevant to the ultimate outcome. In the more realistic situation where side payments are allowed but transactions costs are positive, a unanimity voting rule creates situations where the collective choice may fail a proposed measure even if all members favor the measure in principle. This evidences a disunity between unanimity rules and unanimous outcomes. Constitutional design should focus on rules leading to unanimous outcomes, as opposed to unanimity rules.     

Taxation when Borrowing is Costly*

The implications for taxation theory of a life-cycle model of consumption incorporating financial transactions costs are derived The equity case for progressive taxation is shown to correspond in a life-cycle setting, to an efficiency case. Individuals prefer a progressive tax system to a proportional one because the tax burden is lower when they are young and face high transactions costs of borrowing. Similarly, an income tax is preferred to a consumption tax. Unlike earlier models based on liquidity constraints, the model presented here involves a financial sector consuming real resources. This permits analysis of the tax treatment of financial services in a consumption tax system. Exemption of financial services will generally be desirable.     

Export price adjustments under financial constraints

Exploiting data on the product‐destination‐level transactions of a large panel of Italian firms, we provide evidence that financial constraints affect price variation across exporters. Constrained exporters charge higher prices than do unconstrained firms that export to the same product‐destination market. This pattern is the result of a two‐fold effect. Distressed firms pass on their higher production costs through prices. However, they also charge higher mark‐ups. We explain this evidence referring to models in which rival firms produce different brands of the same product for customers with significant switching costs and producers face capital market imperfections when they need external financing. Our empirical investigations corroborate this explanation: price gaps are higher when switching costs or other forms of demand rigidity are expected to be more relevant.     

Policy persistence in environmental regulation

We study the optimal emission standards under uncertain pollution damages and transaction costs associated with policy changes in a dynamic setting. We consider three alternative forms of transactions costs and show that they can lead to different kinds of delays of policy changes or smaller scales of these changes. Thus, policy persistence can be a rational response of forward-looking policy makers to future transaction costs, rather than an inefficient outcome of the current political process.     

Secondary Capital Markets, Long-Run Growth, and the Term Structure of Asset Yields

An endogenous growth model is presented in which production uses a vector of capital inputs. Technologies for creating capital of different types vary by gestation period and productivity. Ownership of gestating capital must be "rolled over" in secondary capital markets in which transactions are costly. We study how reductions in transactions costs affect the equilibrium growth rate, the rate of return on saving, the volume of activity in secondary capital markets, and the term structure of asset yields. We give conditions under which reductions in transactions costs result in higher or lower growth rates.     

地区市场化进程、市场分割与公司关联交易行为

文章以我国制造类行业上市公司为研究样本,考察转轨经济环境下不同地区间市场化发育水平对企业交易方式的影响。研究发现,与资金占用型关联交易显著不同,购销关联交易能显著提高公司绩效;产品和要素市场越不发达、市场化水平越低的地区企业购销类关联交易越多。结论证明,在市场发育不完善制度环境下,关联购销成为企业降低交易成本的有效交易方式,这支持了关联交易具有效率观的思想。文章结论对于理解转轨经济环境下企业特殊交易行为具有重要意义。     

试论教育管理实践中的交易成本

教育运行同社会经济运行一样,是需要成本的。教育制度的运行,社会、学校和个体在教育中扮演不同的角色,并形成各具特色的交易成本,主要体现在教育中制度框架本身的形成成本和制度框架下各种具体教育行为所需成本。本文在分析教育交易成本的基础上,分别论述了教育制度成本以及教育制度运行中的社会的、学校的和个体的教育交易成本,进而建议在教育管理实践中重视运用交易成本。     

Product mix,transactions and cost behaviour: a study of South African bank branches

This paper utilizes microeconomic theory and a panel data set to assess the impact of product mix and transactions on cost behaviour of bank branches in South Africa over the short and long‐term. Estimates of properties of concavity and monotonocity indicate that the cost functions of typical bank branches in South Africa are neither consistent with short‐term nor long‐term cost‐minimizing behaviour. This corroborates earlier findings which indicate that South African banks have low production efficiency and high market power. In addition the cost functions and two production‐output type indices indicate that overall, the intermediation‐output type mix (foreign exchange and custodial services) has a more significant effect on cost behaviour than the production‐output type mix (cheque and deposit accounts). The variety of production‐output type services provided by a branch appears to have limited effect on costs. However the financial value of production‐output type transactions has an impact on costs while the financial value of intermediation type products does not. Branches that provide intermediation‐output type products tend to have higher variable costs – the key determinant of costs is the number of transactions.     

Exchange rate puzzles: A tale of switching attractors

The rational expectations efficient market model of the exchange rate has failed empirically. In this paper, we develop a model of the exchange rate in which agents use simple forecasting rules. Based on an ex post evaluation of the relative profitability of these rules they decide whether to switch or not. In addition, transactions costs in the goods market are introduced. We show that this simple model creates great complexity in the market which is characterised by the fact that the exchange rate is disconnected from its fundamental most of the time. Finally we show that this model mimicks most of the empirical puzzles uncovered in the literature.     

浅析网上无形市场与传统专业市场的替代性与互补性

网上无形市场和传统专业市场的互替与互补取决于交易主体的理性选择。买卖双方会通过对网上交易的内生交易成本与两种市场交易方式的外生交易成本进行博弈比较来选择最优的流通方式,从而使不同交易制度间呈现出互替与互补状态。网上交易的内生交易成本量则由当该内生交易成本和降低其发生所造成的外生交易成本这两者的总和达到最低时的资源配置量所决定。     

产业结构软化及其对世界经济发展的影响

产业结构的状态总是随着经济发展的变化而处于不断变动之中。20世纪中期以来，以信息技术革命为核心的新技术革命的兴起加速了世界产业结构的全方位变革，出现了产业结构软化的趋势。产业结构软化趋势主要表现为产业结构服务化、高技术化、融合化和国际化，它是世界经济发展的必然结果，同时又对世界经济发展产生了重要的影响。     

传统产业集群空间指向的研究

当前对产业集群问题的讨论一般都界定于一定的空间之内,对于传统产业集群空间指向和空间位移的动态研究显得缺乏,至多也是个案的研究。本文在“集群最终的形成和转移是以经济的自利性为基础”的前提下,从成本(生产成本和交易成本)的角度用经济学的模型分析其演变的规律。最后本文提出:随着社会和经济的发展,区域创新网络(信任等)的构建将对传统产业集群空间指向起到越来越重要的作用。     

Intermediaries in corruption: an experiment

Anecdotal evidence suggests that intermediaries are ubiquitous in corrupt activities; however, empirical evidence on their role as facilitators of corrupt transactions is scarce. This paper asks whether intermediaries facilitate corruption by reducing the moral or psychological costs of possible bribers and bribees. We designed bribery lab experiment that simulates petty corruption transactions between private citizens and public officials. The experimental data confirm that intermediaries lower the moral costs of citizens and officials and, thus, increase corruption. Our results have implications with respect to possible anti-corruption policies targeting the legitimacy of the use of intermediaries for the provision of government services.     

Backward integration and collusion in a duopoly model with asymmetric costs

This paper formalizes the idea that input transactions might be used to implement side payments among colluding firms. A model is proposed to analyze the effect of backward integration on collusive outcomes in a downstream duopoly with asymmetric marginal costs. Vertical integration expands the set of collusive outcomes that are sustainable for a given realization of the discount factor. This is an additional effect of vertical integration that antitrust authorities should consider. Side payments implemented by input sales are more relevant the larger the difference in marginal costs, since they allow for the shifting of production towards the relatively more efficient firms, while maintaining firms’ incentives to collude. A price of the input above that posted by an alternative source or sales of the input below cost may be observed, depending on the realization of downstream firms’ costs.      

(S,s) inventory dynamics and self-organized criticality

This paper proposes a new model of self-organized criticality in order to explain large fluctuations of aggregate production in an (S,s) economy. It is shown that the inventory distribution in an (S,s) economy always converges to a unique steady state, and that aggregate production exhibits a peculiar instability at the steady state: the propagation effect of a demand shock on aggregate production follows a power law.The model differs from previous models of self-organized criticality in that it incorporates a global interaction in the network. The global interaction is interpreted as a representation of market transactions with which economists are familiar. The other novelty of the paper is that an intrinsic instability of (S,s) economies is found. Many small non-linearities in the (S,s) economy may not be cancelled out in aggregation. Instead, they play a key role in organizing the fluctuations of aggregate production.     

INCENTIVE CONTRACTS AND TOTAL FACTOR PRODUCTIVITY*

We propose a transactions cost theory of total factor productivity (TFP). In a world with asymmetric information and transactions costs, productivity must be induced by incentive schemes. Labor contracts trade off marginal benefits and costs of effort. The latter include, in addition to the workers' marginal disutility of effort, organizational costs and rents. As the economy grows, contracts change endogenously, inducing higher effort and productivity. Transactions costs are also affected by societal characteristics that determine the power of incentives. Differences in these characteristics may explain cross‐economy productivity differences. Numerical experiments demonstrate the model's consistency with time‐series and cross‐country observations.