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http://ssrn.com/abstract=1529863
 
 

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The Foundations of a Market Economy: Contract, Consent, Coercion


Yulie Foka-Kavalieraki


University of Athens – Department of Philosophy & History of Science

Aristides N. Hatzis


University of Athens - Department of Philosophy & History of Science; University of Athens - Faculty of Law; Athens University of Economics and Business - Department of Economics

May 26, 2009

European View, Vol. 9, No. 1, pp. 29-37, June 2009

Abstract:     
This article shows how contracts are the institutional foundation of a market economy. Contracts create wealth, allocate risk and are based on consent. There is no perfect competition and the markets are characterized by a number of failures; therefore, contracts are not perfect. However, the existence of these failures does not undermine the importance of contract and consent. A common critique of the market economy is that most transactions are based on some form of coercion. The authors try to address this misconception by showing that a contract is the result of coercion not in cases where a choice is hard for a party but when it offers a choice the party does not want to have.

Number of Pages in PDF File: 9

Keywords: Contract, Consent, Coercion, Market economy, Market failures, Rationality, Perfect competition, Uncertainty

JEL Classification: B40, D02, D63, D81, D86, K12

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Date posted: December 30, 2009 ; Last revised: July 15, 2012

Suggested Citation

Foka-Kavalieraki, Yulie and Hatzis, Aristides N., The Foundations of a Market Economy: Contract, Consent, Coercion (May 26, 2009). European View, Vol. 9, No. 1, pp. 29-37, June 2009. Available at SSRN: http://ssrn.com/abstract=1529863

Contact Information

Yulie Foka-Kavalieraki
University of Athens – Department of Philosophy & History of Science ( email )
MITHE, University Campus
Ano Ilisia
Athens, 15771
Greece
+30-210-7275565 (Phone)
+30-210-7275530 (Fax)
HOME PAGE: http://www.phs.uoa.gr
Aristides N. Hatzis (Contact Author)
University of Athens - Department of Philosophy & History of Science ( email )
MITHE, University Campus
Ano Ilisia
Athens, 15771
Greece
+30 210 7275565 (Phone)
+30 210 7275530 (Fax)
HOME PAGE: http://www.phs.uoa.gr/ahatzis
University of Athens - Faculty of Law
Athens
Greece
Athens University of Economics and Business - Department of Economics ( email )
Athens
Greece
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