The Economic Perspective: Demand and Supply in the Reduction of Transaction Costs in the Ancient World
(Forthcoming) Dari-Mattiacci, Giuseppe, ‘The Economic Perspective: Demand and Supply in the Reduction of Transaction Costs in the Ancient World,’ in Uri Yiftach-Firanko, Dennis P. Kehoe and David M. Ratzan (eds.), Transaction Costs in the Ancient Economy, Ann Arbor (MI): Michigan University
13 Pages Posted: 18 Apr 2013
Date Written: April 18, 2013
In this chapter, I distill some elements of the demand and supply of institutions designed to reduce transaction costs in the ancient world. I some cases, contractual parties could reduce transaction cost by accurately designing contracts. In other cases, the failure of private coordination placed the state in a better position than private parties in reducing transaction costs. I emphasize two such (by no means exclusive) contexts: cases in which the gains from reducing transaction costs were spread among large numbers of transactions and cases in which contracts have effects for third parties. Identifying a demand for state intervention raises the question whether the state supplied the appropriate institutions. The state supply of institutions to reduce transaction costs in the ancient world varied. A political-economy perspective suggests that differences depend on the extent to which the state internalizes the gains generated from such institutions.
Keywords: transaction costs, contracts, economics of the ancient world, contractual registries, property rights, litigation fees
JEL Classification: D23, K11, K12, K41, N00
Suggested Citation: Suggested Citation