Bilateral relationships governed by incomplete contracts

Article Abstract:

Buyers may need goods and services and use an initial contract to asses the type of seller. Hidden information and switching costs tend to be perceived as giving rise to inefficiency, but this may not be the case if contracts are incomplete. High switching costs mean that termination is less likely. Where there are no switching costs the first contract absorbs the rise in trade frequency. Switching costs may increase screening efficiency through improving time allocation between contracts.

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Legal implications of imperfect information in consumer markets

Article Abstract:

Consumers may not have enough information for contracts to work efficiently. They may lack information on areas such as prices and risks involved in the contract. There is no certainty that regulation of contracts would achieve a better result, though there may be an improvement in conditions affecting contracts. There is a need for further research in this area. Product safety has not improved in the US despite spending on insurance in the US to deal with non-pecuniary risks.

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The normative implications of transaction cost economics

Article Abstract:

A recent conference dealt with a wide range of issues relating to transaction cost economics. Discussions relating to the relevance of transaction cost economics to decisionmakers were of particular interest. It is possible to conclude that the use of transaction costs insights in decisionmaking may be limited because transaction cost economics solutions apply specifically to problems related to organising production.

Research

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