Send us a text I have been interested lately in a paper Bill Keech and I were working on a decade ago, It was called " The Anatomy of Government Failure. " Was AC Pigou the first "Public Choice " theorist? There are two transaction costs problems in the background: 1. Information asymmetries and the problem of ignorance 2. Incentive problems and institutional design Market failure is actually a thing . And it can be complicated: K leinman and Teles, "Market and Non-Market Failure s." But so is g...
Jun 18, 2024•24 min•Season 2Ep. 3
Send us a text What if crossing a mere corner of private land could land you in legal hot water? This episode tackles the thorny issue of corner crossing, where public and private lands meet at a single point, creating potential trespassing conflicts. We'll dissect Dave Schmitz's insights on the limits of property rights and the Roman law doctrine of ad coelum, which extends property rights from the heavens to the earth's core. Through landmark cases like Hinman v. Pacific Air Transport and Jacq...
Jun 11, 2024•23 min•Season 2Ep. 2
Send us a text Can a single $100 bill solve an entire town's debt crisis? This riddle is a window into transaction costs. I rely on Jeffrey Rogers Hummel's insights, adding a few thoughts of my own. And a cool letter: Ever wondered why you haggle for a car but not for your morning Starbucks's coffee? Plus, a book recommendation: Nobel Prize-winning economist Edmund Phelps' "My Journeys in Economic Theory," a compelling read that blends economic insights with political theory. Links: David Hender...
Jun 04, 2024•17 min•Season 2Ep. 1
Send us a text What if understanding the hidden costs in every transaction could revolutionize how we see economics? Stephen Medema of Duke University opens up about his academic pivot from computational tax policy to the history of economic thought, weaving in tales of detective-like intrigue and the thrill of uncovering the makers and movers behind economic theories. Beginning with John R. Commons' critical insights, and moving through Ronald Coase's focus on transaction costs as the critical ...
May 28, 2024•1 hr 2 min•Season 1Ep. 27
Send us a text We embark on a journey through the lenses of Hume, Smith, and Coase, piecing together the roles of observation and empirical study in shaping our understanding of societal conventions and moral philosophy. David Schmidtz recounts a defining moment from his academic path, sparking a robust discussion on the fusion of economics with moral considerations in the realm of ownership and resource distribution. The discussion with David delves into the essence of property ownership, disse...
Apr 30, 2024•1 hr 2 min•Season 1Ep. 26
Send us a text Come along on a journey through the corridors of economic history and methodology with our esteemed guest, Bruce Caldwell from the Center for History of Political Economy at Duke University. Caldwell's personal voyage, from the nuances of economic methodology to his deep dive into Austrian economics, sets the stage for an enthralling discussion on the workings of institutions, transaction costs, and the profound impact of Friedrich Hayek's theories on modern economics. Get ready t...
Mar 26, 2024•1 hr 9 min•Season 1Ep. 24
Send us a text The digital realm is rife with invisible threats, and this episode doesn't shy away from the gritty realities of ransomware and the burgeoning industry of cyber insurance. We tackle the conundrum: How do these defensive expenditures impact our economy when they don't actually produce anything tangible? From the early days of cyber insurance to the ongoing battle against hackers, learn how organizations across the board—from the halls of government to the frontlines of business—are...
Feb 27, 2024•45 min
Send us a text Unlock the secrets of the energy market evolution with economist Professor Lynn Kiesling, who brings her expertise on transaction costs and the digital transformation of the electricity industry to our table. Our energized discussion orbits around the innovative world of Distributed Energy Resources (DERs), where we explore the shift from consumers to proactive producers, thanks to technologies like rooftop solar panels and home energy storage. Professor Kiesling, drawing from her...
Jan 30, 2024•1 hr 12 min
Send us a text TAITC tries to navigate the complex world of 5G, Huawei, and the telecom revolution with special guest John Pelson, author of the thought-provoking book, Wireless Wars . With Pelson's unique insights from his time as a corporate executive in the wireless tech industry, we explore the pivotal role of rapid, reliable communication in promoting cooperation and exchange. We'll take up some of the intricacies of switching technology, capacity increases, and how institutions and transac...
Dec 19, 2023•54 min
Send us a text What limits innovation? Is that good? I talk to Adam Thierer, senior fellow at the R Street Institute, exploring the concept of permissionless innovation and its far-reaching implications. From ancient Mesopotamia to the digital revolution, we unpack how policy context shape the trajectory of innovation and, consequently, our society. With Aaron Wildavsky saying "Go!" and my son Kevin Munger saying "Not so fast, there Scooter!", we venture into the contentious territory of innovat...
Nov 21, 2023•51 min•Season 1Ep. 20
Send us a text Are you intrigued by the transformative potential of blockchain and Ethereum? This conversation with Ryan Berckmans, an Ethereum enthusiast and savvy investor, will unravel world that remains mysterious to most. We also reflect on Ethereum's potential as a geopolitical tool and the enticing prospect of stablecoins. As we venture into the world of privacy technologies like zero-knowledge proofs of identity or performance, we walk a knife-edge separating privacy and security. Wrappi...
Oct 31, 2023•46 min•Season 1Ep. 19
Send us a text A thought-provoking conversation about Effective Altruism (EA) with technologist Ben Goldhaber, as we explore its intersections with utilitarianism and transaction costs. We'll try to navigate the tricky terrains of libertarianism and the more "directed" world of EA, balancing directional and destinationist solutions, and the role of strong leadership and community dynamics in maintaining this equilibrium. We'll question the limits of utility maximization as a framework and ponder...
Sep 26, 2023•46 min•Season 1Ep. 18
Send us a text There are three reasons to impose taxes, it seems: 1. To discourage behavior "we" don't like 2. To raise revenue for things "we" want 3. To achieve a pattern of social justice in the distribution of resources What does transaction cost analysis have to tell us about all this? And Bob Barker, and the 99 cent price point. Have you even read Marx? And a new letter. NOTE: This is the last of the regular episodes of Season 1. With the start of the new academic year, TAITC will move to ...
Aug 29, 2023•23 min•Season 1Ep. 17
Send us a text There are many different pricing and packaging schemes for serving food in restaurants, and they all seem to coexist. But there are some significant differences, and thinking in terms of transaction costs and adverse selection can help us understand why. Plus, a TWEJ on the eternal optimism of Keynesians: THIS time it might work! Some links: Yoram Barzel, Measurement Cost and the Organization of Markets. The Journal of Law & Economics, Vol. 25, No. 1 (Apr., 1982), pp. 27-48 ht...
Aug 22, 2023•21 min•Season 1Ep. 16
Send us a text Are HOAs an argument for anarchy, or an example of it? Ex post recontracting as a form a of aggression, when the enforcer of contracts is also a party to the contract. And of course the TWEJ Some Links: How to pronounce “Tiebout” Why you should care about Tiebout Munger on Wealth Taxes, and "Tuh" the Dog Makovi on "Cookie Cutter Covenants" NH property owners say HOA elections are undemocratic Public Goods and "Club" Goods If you have questions or comments, or want to suggest a fut...
Aug 15, 2023•18 min•Season 1Ep. 15
Send us a text The listener letter last week asked about the the three "red dots" that are used to identify liquor stores in South Carolina. Turns out that this kind of "shibboleth" is a way of identifying and discriminating, in ways that can be useful, or harmful. Red Dots in South Carolina: The Robert Moss (SOUTHERN SPIRITS) version South Carolina Encyclopedia (from Moore, John H. “Solving the Red Dot Mystery.” Sandlapper, spring 2000: 32–34.) Shibboleth Gileadites and Ephraimites Background o...
Aug 08, 2023•18 min•Season 1Ep. 14
Send us a text How do you trade off your own interests against the interests of others? And what role do transaction costs play? A discussion of our "interest" in the welfare of others, and the complexity that adds to economic indifference curves. Things take an interesting turn, going toward how transaction costs can shape our institutions and preferences, ranging from a marine fishery to a bowl of M&M's. And TWEJ. Always, TWEJ. Some Resources: Gary Lynne, on Dual Interest Theory: https://j...
Aug 01, 2023•20 min•Season 1Ep. 13
Send us a text What do Monty Python, George Akerlof, and the academic publishing industry have in common? They're all part of the explanation for the way academic publishing works. High transaction costs and the race for tenure often push scholars to prioritize quantity over quality. So, if you've ever wondered why professors seem to produce endless streams of research, this episode is for you. Plus the TWEJ, a triple-header! Some links: 1. Some images sent by EA, about "Desert Town", by Claude ...
Jul 25, 2023•20 min•Season 1Ep. 12
Send us a text Transaction costs can help institutions build loyalty and commitment among their members. Starting with the biblical story of Abraham, we delve into the delicate balance of setting transaction costs to neither alienate nor diminish values. Then: loyalty filters. The civil service of imperial China. Email spam. "The Word of Wisdom", a LDS dietary and lifestyle principle. But....there are cola vending machines at Brigham Young University, a seeming detour from the teachings of the W...
Jul 18, 2023•21 min•Season 1Ep. 11
Send us a text How is buying lettuce like buying lumber? Each is idiosyncratic, and has to be sorted. Imposing the sorting costs on the buyer is actually a way of price discriminating. Clement Atlee and Winston Churchill, for the best TWEJ ever. And a cool new letter, about using transaction costs to separate by type, when type is "private information." Links: "Measurement Costs and Pricing in Retail Produce" Clement Atlee: https://blog.oup.com/2017/06/clement-attlee-timeline/ Atlee and Churchil...
Jul 11, 2023•14 min•Season 1Ep. 10
Send us a text (NOTE: SORRY for audio glitch earlier. Fixed now!) BR asks about the economic content of "old sayings." We talk about habits, character, and "thinking fast and slow." Plus, TWEJ takes on cultural norms. Some links and background: F.A. Hayek on habit and information B. Hooker on Rule Consequentialism Munger on Pave the Muddy Paths Munger on Rule Utilitarianism Russ Roberts on Wild Problems Roberts and Munger on Norms and Sports Roberts and Munger on Cultural Norms David Schmidtz on...
Jul 04, 2023•20 min•Season 1Ep. 9
Send us a text Last week's letter asked about the role of transaction costs in rationing discounted products, or "sales," like "Dollar Hotdog Night!" at the ballpark. As the listener correctly pointed out, this relates to price discrimination, which is a great topic. And....coupons! Some additional links and info: The $21 "Dodger Dog" at Chavez Ravine The " Monkey App" kerfuffle in the Bay Area $1 hotdog night at Philadelphia got out of hand , because of course it did Robert Murphy and the Argum...
Jun 27, 2023•20 min•Season 1Ep. 8
Send us a text Last week's letter asked if charging prices below the "market" price might be rational, but might be an antitrust violation. The TWEJ is a joke about women in prison for having violated rules against "moral" pricing. The actual cartoon is here, preserved for posterity by the good Timothy Taylor . Some links, for more information: Russ Roberts and Michael Munger on John Locke, Prices, and Hurricane Sandy John Locke, "Venditio" Guzman and Munger, " Moral Dilemmas from Locke's Vendit...
Jun 20, 2023•19 min•Season 1Ep. 7
Send us a text Episode 6 takes up the question of "matching," and the transaction costs of dating and marriage. Some resources: Ashley Madison: "Is It Real?" Garrison Keillor, "We are Still Married" Michael Munger, on "Calculation" and socialist economics, at AIER Michael Munger and Russ Roberts, on "Econtalk: WIld Problems" Tyler Cowen and Russ Roberts, on "Making Your Own Economy" Intellectual Property and the Problem of the Anti-Commons Background on search cost and optimal stopping: Secretar...
Jun 13, 2023•22 min•Season 1Ep. 6
Send us a text Episode 5: Notes and Sources Vaughn Baltzly, "Publicized Goods, or the Promiscuity of the Public Goods Argument." https://www.cambridge.org/core/journals/economics-and-philosophy/article/abs/concerning-publicized-goods-or-the-promiscuity-of-the-public-goods-argument/DE16529B673600C47C22B59C87D198A9 Bruce Benson, "Are Roads Public Goods?" https://www.springerprofessional.de/en/are-roads-public-goods-club-goods-private-goods-or-common-pools/11240720 Daniel Klein, KNOWLEDGE AND COORD...
Jun 06, 2023•26 min•Season 1Ep. 5
Send us a text Does Starbucks have surge pricing? What is a Mancgere? Should the Stomach go to the Wheat, or should the Wheat come to the Stomach? Plus, the TWEJ! Some things discussed this week: Michael Munger, "Market Makers or Parasites" https://www.econlib.org/library/Columns/y2009/Mungermiddlemen.html Frederic Bastiat, WHAT IS SEEN AND UNSEEN. https://www.econlib.org/book-chapters/chapter-chapter-1-what-is-seen-and-what-is-not-seen/ Frederic Bastiat, "The Negative Railroad." https://www.lib...
May 30, 2023•21 min•Season 1Ep. 4
Send us a text The third episode for TAITC: First, we take up the question of traffic congestion. Then, does the transaction cost approach have a relationship with moral and ethical theory? Resources: Econtalk: Traffic https://www.econtalk.org/michael-munger-on-traffic/ Roger Congleton Book Solving Social Dilemmas Coase and Epstein: Intellectual Portrait Series, Liberty Fund John R. Commons, 1931, American Economic Review Ronald Coase, 1937, Economica Oliver Williamson, Transaction Cost Economic...
May 23, 2023•18 min•Season 1Ep. 3
Send us a text Why would sellers go to a "place" where many others are also selling the same product? Wouldn't it better to go someplace off by yourself, so you can get the monopoly price? Well, the answer is that transactions"take place," meaning they require a context. Amazingly, it's better to go where all the other sellers are going, because of the problems of triangulation, transfer, and trust. The Sears catalog was a "virtual" (paper) place, and Amazon is another "virtual" (online) place. ...
May 16, 2023•15 min•Season 1Ep. 2
Send us a text The introductory episode for TAITC: "The Answer is Transaction Costs!" The new weekly podcast from Duke University's Mike Munger ( http://michaelmunger.com ) If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz...
May 09, 2023•9 min•Season 1Ep. 1
