![]() But if they are too high, it makes more sense to get the job done by an organization that hires people.Įconomists have long understood the corollary concept of Coase’s ceiling, a point above which organizations collapse under their own weight-where hiring someone, however competent, means more work for everyone else than the new hire contributes. The Coase theorem implies that if these transaction costs are low enough, direct markets of individuals make a whole lot of sense. In 1937, Ronald Coase answered one of the most perplexing questions in economics: if markets are so great, why do organizations exist? Why don’t people just buy and sell their own services in a market instead? Coase, who won the 1991 Nobel Prize in Economics, answered the question by noting a market’s transaction costs: buyers and sellers need to find one another, then reach agreement, and so on. ![]() Here Comes Here Comes Everybody Book Review of Here Comes Everybody: The Power of Organizing Without Organizations ![]()
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