Book | Chapter

211695

Market institutions and economic evolution

Brian J. Loasby

pp. 303-315

Abstract

Our cognitive limitations cause us to rely on institutions to guide reasonable behaviour; market institutions reduce the costs of search, negotiation, and monitoring entailed in making single transactions. The making of markets requires an investment of immaterial capital, the major share of which typically is provided by those who expect to be very active on one side of the market. This "external organisation" provides producers with information for the development of new products; by simplifying transactions it also allows consumers greater scope for developing consumption capabilities. Thus the evolution of institutions guides the evolution of goods and services.

Publication details

Published in:

Mueller Dennis C., Cantner Uwe (2001) Capitalism and democracy in the 21st century: proceedings of the international Joseph A. Schumpeter society conference, Vienna 1998 "capitalism and socialism in the 21st century". Heidelberg, Physica.

Pages: 303-315

DOI: 10.1007/978-3-662-11287-8_15

Full citation:

Loasby Brian J. (2001) „Market institutions and economic evolution“, In: D. C. Mueller & U. Cantner (eds.), Capitalism and democracy in the 21st century, Heidelberg, Physica, 303–315.