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The Market as Organization

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  • Rudolf Richter

Abstract

It is argued that not only hierarchies but also markets can be seen as modes of organization. Potential traders face the problem of choosing first a specific market organization before they start trading. Attention is focused on implicitly agreed-upon market organizations. They are interpreted as equilibrium organizations of markets in the sense of the institution-as-an-equilibrium-of-a-game approach. This is illustrated for the case of price leadership cum advertising competition - exemplified by the American cigarette industry between the two World Wars. As a result, the theory of oligopoly appears in a different light. (JEL: D 02, D 83, L 14, Z 13)

Suggested Citation

  • Rudolf Richter, 2007. "The Market as Organization," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(3), pages 483-492, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200709)163:3_483:tmao_2.0.tx_2-e
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    References listed on IDEAS

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    1. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
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    4. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    5. Greif, Avner, 1994. "On the Political Foundations of the Late Medieval Commercial Revolution: Genoa During the Twelfth and Thirteenth Centuries," The Journal of Economic History, Cambridge University Press, vol. 54(2), pages 271-287, June.
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    Citations

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    Cited by:

    1. William A. Jackson, 2024. "Markets as dualistic, semi-decentralized organizations," Review of Evolutionary Political Economy, Springer, vol. 5(1), pages 153-172, June.
    2. William A Jackson, 2024. "Dualities in the Organising of Markets," Discussion Papers 24/02, Department of Economics, University of York.
    3. Cristiano Antonelli & Morris Teubal, 2010. "Venture Capitalism as a Mechanism for Knowledge Governance," Chapters, in: Riccardo Viale & Henry Etzkowitz (ed.), The Capitalization of Knowledge, chapter 3, Edward Elgar Publishing.
    4. Antonelli, Cristiano & Teubal, Morris, 2008. "Venture Capital as a Mechanism for Knowledge Governance: New Markets and Innovation-Led Economic Growth," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200805, University of Turin.
    5. Teodor Sedlarski, 2012. "Institutional strengthening of the free market in the new economic history," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 83-109.
    6. Teodor Sedlarski, 2014. "Socio-psychological aspects of market exchange in institutional economy," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 95-114.

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    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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