An Anatomy of Economic Transactions
3. 3.1 Terms and concepts for an analysis of exchange OVERVIEW As indicated in Chapter 2, this book revolves around the proposition that the characteristics of any transaction are rooted in only three groups of basic elements. These groups consist of the item that is being exchanged, the environment in which the transaction occurs and the actors involved in the transaction, respectively. The purpose of the present chapter is to indicate how this approach to transactions is connected with the existing literature. It describes the concepts developed by other authors that will be used here. It also reviews the meaning attached to terms like exchange, transactions and markets that are continuously used in this study. Section 3.2 provides a discussion of a variety of terms and concepts derived from the body of literature that has become known as the new institutional economics (NIE). Section 3.3 contains a selective outline of transaction cost economics (TCE), a rapidly expanding branch of NIE. TCE argues that transactions with different characteristics are placed under different governance structures in order to economize on transaction costs. In more than one respect TCE complements our own approach as outlined in Chapter 2. Where TCE is concerned with the justification of the main governance structures within which transactions occur – such as markets, firms, families and public bureaus – our approach goes further in aiming to identify the specific exchange configuration and resulting transactions that obtain given the specific nature of the elements that prevail in the setting under consideration....
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