The Answer Is Transaction Costs

Send us a textEpisode 6 takes up the question of "matching," and the transaction costs of dating and marriage.  Some resources:  Ashley Madison:  "Is It Real?"Garrison Keillor, "We are Still Married"Michael Munger, on "Calculation" and socialist economics, at AIER Michael Munger and Russ Roberts, on "Econtalk: WIld Problems"  Tyler Cowen and Russ Roberts, on "Making Your Own Economy"Intellectual Property and the Problem of the Anti-CommonsBackground on search cost and optimal stopping:Secretary Problem ISecretary Problem IIIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textEpisode 5: Notes and Sources  Vaughn Baltzly, "Publicized Goods, or the Promiscuity of the Public Goods Argument."   https://www.cambridge.org/core/journals/economics-and-philosophy/article/abs/concerning-publicized-goods-or-the-promiscuity-of-the-public-goods-argument/DE16529B673600C47C22B59C87D198A9 Bruce Benson, "Are Roads Public Goods?"https://www.springerprofessional.de/en/are-roads-public-goods-club-goods-private-goods-or-common-pools/11240720 Daniel Klein, KNOWLEDGE AND COORDINATION.   https://www.amazon.com/Knowledge-Coordination-Interpretation-Daniel-Klein/dp/019979412X/ref=sr_1_1?ie=UTF8&qid=1324300010&sr=8-1 Thomas Schelling, THE STRATEGY OF CONFLICT.  http://elcenia.com/iamapirate/schelling.pdf "Are Roads Really Public Goods?"  https://fee.org/articles/are-roads-really-public-goods/ "Economists on Federal Funding for NPR." National Public Radio, PLANET MONEY.  https://www.npr.org/transcripts/134863998 "The Fundamental Law of Road Congestion."  https://cityobservatory.org/the-fundamental-global-law-of-road-congestion/ "Tolls on the Connecticut Turnpike."   https://www.latimes.com/archives/la-xpm-1985-10-10-mn-15553-story.html If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textDoes Starbucks have surge pricing?What is a Mancgere?Should the Stomach go to the Wheat, or should the Wheat come to the Stomach?Plus, the TWEJ!Some things discussed this week:Michael Munger, "Market Makers or Parasites" https://www.econlib.org/library/Columns/y2009/Mungermiddlemen.htmlFrederic Bastiat, WHAT IS SEEN AND UNSEEN. https://www.econlib.org/book-chapters/chapter-chapter-1-what-is-seen-and-what-is-not-seen/Frederic Bastiat, "The Negative Railroad." https://www.libertarianism.org/publications/essays/negative-railroadDavid Friedman, HIDDEN ORDER.   http://ndl.ethernet.edu.et/bitstream/123456789/2041/1/47.pdf.pdf If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textThe third episode for TAITC: First, we take up the question of traffic congestion. Then, does the transaction cost approach have a relationship with moral and ethical theory?Resources:Econtalk: Traffic  https://www.econtalk.org/michael-munger-on-traffic/Roger Congleton Book  Solving Social DilemmasCoase and Epstein: Intellectual Portrait Series, Liberty FundJohn R. Commons, 1931, American Economic ReviewRonald Coase, 1937, EconomicaOliver Williamson, Transaction Cost EconomicsDouglass North, InstitutionsAnd of course the TWEJThe letter, for this week, from Anonymous: Does Starbucks have surge pricing? Once you realize that TAITC, then of course they do. If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textWhy would sellers go to a "place" where many others are also selling the same product? Wouldn't it better to go someplace off by yourself, so you can get the monopoly price? Well, the answer is that transactions"take place," meaning they require a context. Amazingly, it's better to go where all the other sellers are going, because of the problems of triangulation, transfer, and trust.  The Sears catalog was a "virtual" (paper) place, and Amazon is another "virtual" (online) place. But the answer to why we do that is "transaction costs." But then I go back in time to my own introduction to the notion of transaction costs, in a class taught by the remarkable economist Yoran Barzel. The puzzle is so simple that it seems dumb: why do we measure lettuce by the head, meat by the pound, and diamonds by the caret?Yoram Barzel, Measurement Cost and the Organization of Markets.The Journal of Law & Economics, Vol. 25, No. 1 (Apr., 1982), pp. 27-48https://www.jstor.org/stable/725223Brian Albrecht, Brian Albrecht at Int Cent for Law and Econhttps://pricetheory.substack.com/p/are-transaction-costs-just-costs Plus, the TWEJ! And our first letter, as a homework assignment. Are congestion taxes an effective way to overcome transactions costs pertaining to efficient use of roads?  Probably not the best.  There is no externality with congestion, because everyone stuck in traffic has moved to the harm. Those who could be held liable for causing congestion are not those who pay for a variable toll, but those who come later. We'll talk about this in Week 3!If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz

Send us a textThe introductory episode for TAITC: "The Answer is Transaction Costs!"  The new weekly podcast from Duke University's Mike Munger (http://michaelmunger.com)If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz