Grounding the Theory of a Firm in the Natural Sciences

Presented to the 13th Annual Meeting of the Society for the Advancement of Socio-Economics, University of Amsterdam, Amsterdam, The Netherlands, June 30, 2001

32 Pages Posted: 21 Sep 2001 Last revised: 26 Jun 2008

See all articles by Shann Turnbull

Shann Turnbull

International Institute for Self-Governance; Sustainable Money Working Group; New Garden City Alliance

Date Written: January 6, 2008

Abstract

This paper uses data rather than costs as the unit of analysis to answer questions raised by Luigi Zingales (2000) searching for "new foundations" in The Theory of the Firm. Any co-ordination between individuals requires communication of data to share information, knowledge and wisdom. Individuals have physiological and neurological limits in transacting data that can be measured in bytes. Transaction Byte Analysis creates a framework for subsuming transaction costs when costs represent a proxy for information. The paper posits that network firms exist and are sustained in "the new economy" by their ability to economize the bytes transacted by individuals.

Keywords: Communication, Control, Coordination, Governance, Information, Regulation, Theory of the firm, Transaction costs.

JEL Classification: B41, D21, D23, D72, D85, G34, L2

Suggested Citation

Turnbull, Shann, Grounding the Theory of a Firm in the Natural Sciences (January 6, 2008). Presented to the 13th Annual Meeting of the Society for the Advancement of Socio-Economics, University of Amsterdam, Amsterdam, The Netherlands, June 30, 2001, Available at SSRN: https://ssrn.com/abstract=283785 or http://dx.doi.org/10.2139/ssrn.283785

Shann Turnbull (Contact Author)

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