IDEAS home Printed from https://ideas.repec.org/a/bpj/maneco/v1y2014i2p20n5.html

Alchian, Buchanan, and Coase: A Neglected Branch of Chicago Price Theory

Author

Listed:
  • Boettke Peter J.

    (Department of Economics & Philosophy, The F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics, Mercatus Center, George Mason University, Fairfax, VA 22030, USA)

  • Candela Rosolino A.

    (Department of Economics, The F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics, Mercatus Center, George Mason University, Fairfax, VA 22030, USA)

Abstract

This paper suggests that there exists a neglected third branch of Chicago price theory, which includes Armen Alchian (1914–2013), James Buchanan (1919–2013), and Ronald Coase (1910–2013). While this branch shares characteristics that are common to the other branches of Chicago price theory, there are two fundamental contributions of this branch that distinguishes it from the others in the Chicago price theory tradition. The first contribution is the application of the logic of choice in discovering alternative institutional arrangements. That is, individuals will engage in exchange not only within a given institutional arrangement, but will also engage in exchange behavior to foster more preferable institutional arrangements that further the particular goals of the exchanging parties. The second contribution is the notion that the provision of markets is an entrepreneurial activity. We argue that this Alchian, Buchanan, Coase approach to price theory provides not only a bridge between the “Old” Chicago School and the “New” Chicago School but also an alternative development of the Chicago School. Our paper, while building on the joint insights of Alchian, Buchanan, and Coase, is focused on Coase’s development of this approach, and clarifying his contribution. By drawing the economist’s attention to transactions costs, Coase more than any other economist of the twentieth century brought institutional analysis to the foreground by stressing the role they play in ameliorating or exacerbating conflicts in a world of positive transactions costs.

Suggested Citation

  • Boettke Peter J. & Candela Rosolino A., 2014. "Alchian, Buchanan, and Coase: A Neglected Branch of Chicago Price Theory," Man and the Economy, De Gruyter, vol. 1(2), pages 189-208, December.
    • Handle: RePEc:bpj:maneco:v:1:y:2014:i:2:p:20:n:5
    DOI: 10.1515/me-2014-0022
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/me-2014-0022
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/me-2014-0022?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Reder, Melvin W, 1982. "Chicago Economics: Permanence and Change," Journal of Economic Literature, American Economic Association, vol. 20(1), pages 1-38, March.
    3. Leeson, Peter T. & Boettke, Peter J., 2009. "Two-tiered entrepreneurship and economic development," International Review of Law and Economics, Elsevier, vol. 29(3), pages 252-259, September.
    4. Coase, R H, 1974. "The Lighthouse in Economics," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 357-376, October.
    5. Stringham, Edward, 2002. "The Emergence of the London Stock Exchange as a Self- Policing Club," MPRA Paper 25415, University Library of Munich, Germany.
    6. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, January.
    7. repec:jpe:journl:126 is not listed on IDEAS
    8. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    9. Becker, Gary S, 1974. "A Theory of Marriage: Part II," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 11-26, Part II, .
    10. Gary S. Becker, 1974. "A Theory of Marriage," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 299-351, National Bureau of Economic Research, Inc.
    11. Peter Murrell, 1991. "Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 59-76, Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter J. Boettke & Rosolino A. Candela, 2020. "Where Chicago meets London: James M. Buchanan, Virginia Political Economy, and cost theory," Public Choice, Springer, vol. 183(3), pages 287-302, June.
    2. Abigail Devereaux, 2025. "Costs of choice: reformulating price theory without heroic assumptions," Public Choice, Springer, vol. 202(3), pages 455-481, March.
    3. Marek Hudik, 2024. "Externality as a coordination problem," Public Choice, Springer, vol. 201(3), pages 495-510, December.
    4. Alain Marciano, 2019. "Ronald H. Coase (1910–2013)," Palgrave Macmillan Books, in: Robert A. Cord (ed.), The Palgrave Companion to LSE Economics, chapter 0, pages 555-577, Palgrave Macmillan.
    5. Peter J. Boettke & Rosolino A. Candela, 2017. "Rational choice as if the choosers were human," Chapters, in: Morris Altman (ed.), Handbook of Behavioural Economics and Smart Decision-Making, chapter 4, pages 68-85, Edward Elgar Publishing.
    6. Rosolino A. Candela & Vincent Geloso, 2019. "Coase and transaction costs reconsidered: the case of the English lighthouse system," European Journal of Law and Economics, Springer, vol. 48(3), pages 331-349, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabio Tramontana, 2010. "Economics as a compartmental system: a simple macroeconomic example," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(4), pages 347-360, December.
    2. Chesney, Marc & Hazari, Bharat, 1998. "Irrational entry, rational exit," Journal of Mathematical Economics, Elsevier, vol. 29(1), pages 1-13, January.
    3. Carolina Álvarez-Garavito & Hugo Nicol�s Acosta-Gonz�lez, 2021. "Femicide in Latin America: An economic approach," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 88(1), pages 11-42.
    4. Helen V. Tauchen & Ann Dryden Witte & Sharon K. Long, 1985. "Domestic Violence: A Non-random Affair," NBER Working Papers 1665, National Bureau of Economic Research, Inc.
    5. Siti Nur Zahara HAMZAH & Evan LAU, 2013. "The role of social factors in explaining crime," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(6(583)), pages 99-118, June.
    6. Kota Ogasawara & Mizuki Komura, 2022. "Consequences of war: Japan’s demographic transition and the marriage market," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(3), pages 1037-1069, July.
    7. Rania Gihleb & Osnat Lifshitz, 2022. "Dynamic Effects of Educational Assortative Mating on Labor Supply," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 46, pages 302-327, October.
    8. Eugene Choo & Shannon Seitz, 2013. "The Collective Marriage Matching Model: Identification, Estimation, and Testing," Advances in Econometrics, in: Structural Econometric Models, volume 31, pages 291-336, Emerald Group Publishing Limited.
    9. Lepinteur, Anthony & Flèche, Sarah & Powdthavee, Nattavudh, 2016. "My Baby Takes the Morning Train: Gender Identity, Fairness, and Relative Labor Supply Within Households," IZA Discussion Papers 10382, IZA Network @ LISER.
    10. Tetyana Zubro, 2014. "Vnútropolitické Determinanty Krízovej Situácie Na Ukrajine," Almanach (Actual Issues in World Economics and Politics), Ekonomická univerzita, Fakulta medzinárodných vzťahov, vol. 9(1), pages 73-85.
    11. Marianne Bertrand & Emir Kamenica & Jessica Pan, 2015. "Gender Identity and Relative Income within Households," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(2), pages 571-614.
    12. Davi B. Costa, 2021. "Benefits of marriage as a search strategy," Papers 2108.04885, arXiv.org, revised Aug 2021.
    13. Wolfgang Frimmel & Martin Halla & Rudolf Winter-Ebmer, 2014. "Can Pro-Marriage Policies Work? An Analysis of Marginal Marriages," Demography, Springer;Population Association of America (PAA), vol. 51(4), pages 1357-1379, August.
    14. Gordon B. Dahl & Enrico Moretti, 2004. "The Demand for Sons: Evidence from Divorce, Fertility, and Shotgun Marriage," NBER Working Papers 10281, National Bureau of Economic Research, Inc.
    15. Marion Leturcq, 2011. "Competing marital contracts? The marriage after civil union in France," Working Papers halshs-00655585, HAL.
    16. Jara-Díaz, Sergio & Rosales-Salas, Jorge, 2017. "Beyond transport time: A review of time use modeling," Transportation Research Part A: Policy and Practice, Elsevier, vol. 97(C), pages 209-230.
    17. Alm, James & Whittington, Leslie A., 1997. "Income taxes and the timing of marital decisions," Journal of Public Economics, Elsevier, vol. 64(2), pages 219-240, May.
    18. Prajapati, Hari Ram, 2012. "An Application of Game Theory in Strategic Decision of Marriage Occurrence," MPRA Paper 105344, University Library of Munich, Germany, revised 2013.
    19. Elizabeth M. Caucutt & Nezih Guner & John Knowles, 2001. "The Timing of Births: A Marriage Market Analysis," Penn CARESS Working Papers 49355d43c11f2314075e8b54e, Penn Economics Department.
    20. Aldy, Joseph, 2019. "Birds of a Feather: Estimating the Value of Statistical Life from Dual-Earner Families," Working Paper Series rwp19-013, Harvard University, John F. Kennedy School of Government.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:maneco:v:1:y:2014:i:2:p:20:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.