Costs of Negotiating

Ouvido recentemente num dos meus podcasts favoritos.

Jon Udell’s Interviews with Innovators
Virtual Successes and Failures, with Linden Lab‘s founder and chairman Philip Rosedale

I think that the general trend that drives decentralization in companies is the observation that, as communication technology makes transparency cheaper, the necessity for central control drops.
This actually goes back to the 1930s, there was this guy [Ronald] Coase, i think was is name, that wrote the theory of the firm (…) what he said was that the transaction cost of people negotiating with each other to work together, fundamentally.. if it’s high than it’s better for the individuals to work together within a firm where they abide by the planning and regulation of the firm as a means of making them more collectively efficient and not having to negotiate with each other for everything.
But what is interesting is that as technology improves the cost of negotiating drops.”

por Vitor Silva



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