The Answer Is Transaction Costs
Bees, Oranges, and Externalities: The Answer is Transaction Costs
Jul 16, 2024
Exploring the relationship between beekeepers and orange grove owners, focusing on transaction costs and externalities. Historical examples of positive externalities, hive collapse impacts, and the use of bearer bonds in international trade. An entertaining mix of economics and real-world examples.
26:31
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Quick takeaways
- Bees play a vital role in pollination and highlight transaction costs in market dynamics.
- Ronald Coase challenges traditional views on externalities, emphasizing the role of transaction costs in market interactions.
Deep dives
Bees and Transaction Costs in Orange Groves
Having grown up on an orange farm surrounded by orange groves, the podcast delves into the intricate relationship between bees, pollination, and transaction costs. The importance of bees in pollinating orange blossoms for fruit production is highlighted, emphasizing the essential role of bees in the ecosystem. This scenario presents a demonstration of the problem of transaction costs, where the value exchange between beekeepers and orange grove owners is explored, showcasing how competitive services and market dynamics determine the flow of payments.
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