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Firm versus Market – Coase Revisited

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  • Plamen D. Tchipev

Abstract

In November 1937 Ronald Harris Coase published his fundamental article "The Nature of the Firm", throwing the gauntlet to neoclassical economics, which could not be responded properly already 80 years. The task presented by Coase to the economic community is simple to failure. Reminding us, that in the economic system, led by the free price movements in which all resources are allocated by the price mechanism, we find, in the words of a contemporary economist, "islands of conscious power in this ocean of unconscious co-operation like lumps of butter, which coagulating in a pale of butter", the great scholar asked: why do we need that at all? Why, in the coordinating role of the market does appear the inevitable figure of entrepreneur-coordinator, who leads the production? Indicating that the company and the market are alternative ways of organizing, Coase released genie out of the bottle, because the answer he provided, actually launched an endless string of debates, hypotheses, competing explanations - what exactly is the nature of the company. This paper aims to provide a more detailed look at the essence of the dilemma posed by R. Coase, paying tribute to the anniversary of the issue of his genius work.

Suggested Citation

  • Plamen D. Tchipev, 2018. "Firm versus Market – Coase Revisited," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 79-85.
  • Handle: RePEc:bas:econst:y:2018:i:5:p:79-85
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    References listed on IDEAS

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    1. Tony Lawson, 2015. "The nature of the firm and peculiarities of the corporation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 39(1), pages 1-32.
    2. Granovetter, Mark, 1995. "Coase Revisited: Business Groups in the Modern Economy," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 4(1), pages 93-130.
    3. Williamson, Oliver E, 1995. "Hierarchies, Markets and Power in the Economy: An Economic Perspective," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 4(1), pages 21-49.
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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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