Shackle (1972) argued, “… capital is time … capital is the manifestation of the role of time lapse in the productive process … capital is delay. But delay is an inconvenience, a disutility, a discomfort, something which will not be borne except for a reward. … capital seems to … offer a prize for the endurance of delay … (as) a marginal balance.” A pure Austrian approach assumes that deferments are pre-reconciled amongst parties. Prereconciliation takes place through coordination or inter-operability of the first mode, as Read the rest of this entry »
In this section we elaborate upon coordination that appears necessarily between producers. The context of production is a sequential competition that is production of future products through innovations and based upon increasing returns and along dynamic equilibrium. Successions of short-lived products from several producers must entangle them in a web of expectations on successions. Another aspect of a product is that a product in the future must remain interoperable with a set of other products emergent from complementors lying in the scope direction. Richardson (1997, 1998) did not elaborate upon Read the rest of this entry »
Moreover previous markets with near-zero innovations in products could afford to make calculations on prices and quantities, such as the average cost, marginal cost and marginal return. In sequential competition no product can complete its life cycle and hence calculations of quantities and prices remain no longer exogenous. Price-quantity variables now come under the scanner of negotiated endogenous settlements. Uncertainties about the potential product and information asymmetries between the current
product market and that of the market of the product next in sequence necessarily implicates Read the rest of this entry »
Ecom mediates between price quantity and most importantly the product (innovation) decisions of the producer, and the utility expectations of the customers. Under the circumstances of no-innovation, or of one single homogeneous product enjoying monopoly a la Chamberlin (1933), there is no need for coordination between the producer and the customer. However, following Richardson’s (1996) argument, a market experiences a sequential competition between succeeding monopolists (contrary to Chamberlin’s picture of co-existing monopolists) when there are continuous innovations in product. This sequential Read the rest of this entry »
Received theory presents intermediation as the structure of a market. Microstructure of a market (O’Hara, 1997; Goodhart, 1989) refers to dynamics of transactions, relations, expectations and the time. Intermediaries served the most essential function of the microstructures of a market. Economic agents who interpolate them in between the producer of a good or services and its consumer are intermediaries according to the structural theorist. As a result of this structural emphasis the presence and the relevance
of an intermediary can be analyzed in terms of costs of transactions. A dispersed microstructure of Read the rest of this entry »
A long period of production refers to the entire input-output table of an economy. A short period of production refers to a specific transaction chain of a business or a sector. Electronic commerce increases the length of both these periods. Vertical integration linked up several such industrial sectors. Ecom and associated expansion along the direction of scope have crossed boundaries of specific transaction chains or of industry sectors. Increases in these periods take place because of several other factors as well. With an increase in the division of labor there would be increases in asymmetric information, insurance and Read the rest of this entry »
There, however, is another aspect of TCE and externality. We know following the formulation (in the Pigovian tradition) on externalities by Coase (1960) that the extent a property owner can affect others without paying for these effects there arises a social cost, which is greater than their private costs. Coase argued that owing to imperfections in property rights this externality that is the divergence between private costs and social costs appear and the institution of price fails to clear such externalities. This phenomenon gives rise Read the rest of this entry »