An Austrian Critique Of Transacton Cost Theory

An Austrian Critique of Transaction Cost Theory
En østrigsk økonomisk kritik af transaktionsomkostnings teori A paper at the School of Economics and Management, Aarhus University

Course: Written by: Student ID: Supervisor: Hand-in date:

4810: Topics in Economics and Management – 10 ECTS Jesper Juul Andersen 20062256 Niels Peter Mols 28-01-2011

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An Austrian Critique of Transaction Cost Theory – Jesper Juul Andersen – Arhus University – School of Economic and Management

Contents
Contents ............................................................................................................................................................ 2 Introduction....................................................................................................................................................... 3 The Austrian Understanding of the Market ...................................................................................................... 4 Human Action ................................................................................................................................................ 4 The Use ofKnowledge in Society .................................................................................................................. 5 Solving the Hayekian Knowledge Problem ................................................................................................ 5 The Entrepreneur.......................................................................................................................................... 6 The Pure Entrepreneur .............................................................................................................................. 7 Entrepreneurial profit, alertness and knowledge ..................................................................................... 8 DisequilibriumAnalysis.................................................................................................................................. 9 The Evenly Rotating Economy ................................................................................................................... 9 The Equilibrating Entrepreneur ............................................................................................................... 10 An Austrian Critique ofTransaction Cost Theory ............................................................................................ 11 A Critique of Equilibrium analysis ................................................................................................................ 11 The Market Theory Problem....................................................................................................................... 12 Transaction Cost Theory and the MTP ........................................................................................................ 13 Equilibrium used as a foil, description or benchmark? ........................................................................... 14 Uncertainty and open ended vs. closed view of the universe................................................................ 15 Information and Knowledge .................................................................................................................... 16 Disequilibrium analysis and the (Absent) Entrepreneur ......................................................................... 16 Conclusion....................................................................................................................................................... 17 References ....................................................................................................................................................... 19

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An Austrian Critique of Transaction Cost Theory – Jesper Juul Andersen – Arhus University – School of Economic and Management

Introduction
Transaction Cost Theory...