Visiting Fellow to Northampton Business School
If Coase, Williamson and Chandler are right, therefore, the modern company is the creature of market inefficiencies, and particularly of substantial transaction costs. These are of three kinds:
1. Search and information costs incurred while finding the required goods or services at the lowest price.
2. Bargaining costs incurred while reaching an agreement with the other party, drawing up contracts, etc..
3. Policing and enforcement costs incurred while ensuring the other party sticks to the terms of the contract.
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