By: Andrea Mangani

Andrea Mangani — Mon, 31 Mar 2008 16:27:14 +0000

It is curious that Meyer claims that “searching for information on the Internet involves something like transaction costs because we have so many varied sources to evaluate”. In reality, information costs are, for Coase, the main source of transaction costs (that is, the cost “of discovering what the relevant prices are”, as well as any other information about contractual conditions on the market). Today, information costs are partially neglected by neo-institutional scholars, who prefer to focus on post-contractual sources of transaction costs. However, I think that the existence and the boundaries of newspapers depend on where the web produces a higher reduction of transaction costs. In other words, consumers can collect information through the Internet at a lower cost, but also journalists use the Internet to gather and elaborate information, and the costs of internal organization of newspapers decrease.

By: aje

aje — Mon, 31 Mar 2008 16:16:48 +0000

A recent edition of Ama-Gi featured an article on this topic by Chris Dillow – blogger at Stumbling & Mumbling, and himself a finance journalist. Quote:
Take my own business, journalism. Some journalists work as freelancers, in the Hayekian world of markets. But most live in the Coasean world of central planning, taking orders from editors.
To see why, imagine an editor ringing a freelancer:
Editor: “can you write 1000 words on private equity for tomorrow?”
Freelancer: “I can’t. I’m busy doing other stuff.”
The conversation stops. If the freelancer were an employee, however, the editor could order him to stop that other work. It’s therefore more efficient for the freelancer to become an employee. So a firm emerges.

http://personal.lse.ac.uk/LAZANSKI/hayek/8/Ama-gi_2007.pdf

Comments on: Newspapers as Coasian Firms

By: Andrea Mangani

By: aje