🏙️ Chicago: Ideas That Argue With Each Other
Price theory, transaction costs, and the behavioral turn, gathered as an argument rather than a doctrine.
One department produced the claim that incentives explain crime and schooling, the claim that legal rules matter because bargaining is expensive, and the claim that people systematically fail to optimize at all. Treating these as a single school flattens what is most useful about them.
Read as a running argument they are a better teacher. Coase asks what it costs to make a deal. Becker asks what people are trading off when no money changes hands. Thaler asks whether the trade-off is being computed at all. Each question is a lens, and a case that one handles cleanly another will handle badly.
In This Collection
- Ronald Coase
Trading is not free, and once you price the act of dealing, firms and legal rules stop being background. - Gary Becker
The same tools that price wheat, pointed at crime, schooling, and family choices. - Richard Thaler
The counterargument, assembled from inside: people follow defaults, and someone has to write them. - Kahneman and Tversky
The psychology the behavioral turn was built on, produced outside economics entirely. - Elinor Ostrom
Field evidence that answers the assign-an-owner prescription with a documented third option. - The Whaling Commons Collapse: An Open Ocean With No Owner
A bargain over rights is unavailable when the parties cannot be identified, let alone assembled at a table. - Breaking Up Standard Oil: The Rebate Machine and the Rule of Reason
Where the long argument runs: when a dominant firm is an efficiency, and when it is a toll booth. - The Housing Standoff That Is Not a Crash
Sellers who refuse to cut price look irrational until you find the reference point they are anchored to. - The Fence Line
The neighbor problem Coase actually wrote about: who holds the right, and what would trading over it cost?