| Publisher | Brigham Young University | ||
|---|---|---|---|
| Format | 288.5KB PDF | Date added | 11 May 2006 |
| Topics | Network Design | ||
| Downloads | 1 | ||
The goal in this paper is to explain the location of transactions (and contracts) in a larger system of production. The paper first characterizes the system as a network of tasks and transfers. While transfers between agents are necessary and ubiquitous, the mundane transaction costs of standardizing, counting, valuing and paying for what is transferred make it impossible for all transfers to be transactions. The paper argues that the modular structure of the network determines its pattern of mundane transaction costs, and thus establishes where cost-effective transactions can be located.
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