Institutional Arrangements Empower Individuals to Reshape Markets
The article discusses a lesser-known part of Chicago price theory involving economists Alchian, Buchanan, and Coase. They introduce key ideas that set them apart from other Chicago School thinkers. They argue that people not only make choices within existing ways of doing things but also work to create new systems that suit them better. Additionally, they suggest that setting up markets is a form of entrepreneurship. Coase, in particular, emphasizes that understanding transaction costs is crucial for managing conflicts. This unique approach combines elements of both the traditional and modern Chicago School views, providing valuable insights into how economic systems function.