(2018-06-10) Azhar Coasian Boundary Blur

Azeem Azhar: Blurring the Coasian Boundary

The Coasian boundary is that marginal point where it’s cheaper to go to the market than to operate with the fiat power you have over employees. But three trends have started to blur the definitions of “in-firm” and “out-to-market”, and a new pair of structures seems to be winning support. (Theory of the Firm)

The first is the ecosystem and partnership model where risk is broadly shared across a complex web of partners in a supply network.

The other trend is the marketplace platform which explicitly coordinates two or more sides to provide a service. The fastest growth is in the gig economy.

The third trend is that “token economies” or “token networks” (BlockChain) designed to incentivise participants in a particular economic space, and then facilitate coordination amongst them without a traditional corporation at the centre.