Transaction Cost Economics in the Digital Economy: A Research Agenda

29 Pages Posted: 30 Jul 2020

See all articles by Frank Nagle

Frank Nagle

Harvard Business School

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Steven Tadelis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: July 20, 2020

Abstract

Transaction Cost Economics (TCE) theory has played an important role in understanding when it is more efficient for a transaction between two parties to occur within the market or within an organization. However, as more transactions occur in a digitally-mediated fashion, open questions remain as to how TCE applies in the digital economy. In this article, we consider how digital transformation helps us probe the boundary conditions of TCE and how, despite all the changes wrought by digital transformation, TCE can still provide a useful lens to help scholars and practitioners understand the organization of economic activity in the market-based economic system. We highlight three characteristics of digitally-mediated transactions: reputation mechanisms, private information, and non-pecuniary transactions and then discuss how these characteristics offer opportunities for future research and lay out a research agenda for this increasingly important area.

Suggested Citation

Nagle, Frank and Seamans, Robert and Tadelis, Steven, Transaction Cost Economics in the Digital Economy: A Research Agenda (July 20, 2020). Harvard Business School Strategy Unit Working Paper No. 21-009, Available at SSRN: https://ssrn.com/abstract=3661856 or http://dx.doi.org/10.2139/ssrn.3661856

Frank Nagle (Contact Author)

Harvard Business School ( email )

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Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business ( email )

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Suite 9-160
New York, NY NY 10012
United States

Steven Tadelis

University of California, Berkeley - Haas School of Business ( email )

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2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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