Knowledge, Truth and the History of Economic Thought
Edited by Stephan Boehm, Christian Gehrke, Heinz D. Kurz and Richard Sturn
Chapter 20: Information costs, deliberation costs and transaction costs: a parallel treatment*
20. Information costs, deliberation costs and transaction costs: a parallel treatment* Maurice Lagueux It seems reasonable to say that everything which is valuable has a cost. Accordingly, one may conclude that useful information, rational deliberation and advantageous transactions are three services which should have a cost just like any other services. However, it is well known that, in contrast to more standard services, these have enduringly been perceived by most economists, at least until the mid-twentieth century, as zero-cost commodities. Buyers and sellers were assumed to get information, to deliberate and to negotiate about various kinds of transactions, but no specific cost was associated with such activities. Economic agents being assumed to choose what they consider the most advantageous to them, it would have been inconceivable in this context that these agents would drop the allegedly free benefits drawn from more information, more deliberation and more transactions. And, since searching for information, deliberating and negotiating can take a great deal of time (not to mention various other correlative expenses) and since it is well known, at least since Benjamin Franklin, that Ôtime is moneyÕ, assuming zero cost for these desired benefits was tantamount to assuming that the activities that provide them were accomplished instantaneously. But to dispose instantaneously Ð without devoting any time or other kinds of resources to the acquisition of such a commodity Ð of all the information which might be economically relevant implies that all possible knowledge is already available or, put otherwise, it implies omniscience to start with....
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