Two-way Communication Costs and the Boundaries of the Firm

Nigel Wadeson

International Journal of the Economics of Business, 1999, vol. 6, issue 3, pages 301-329

Abstract: Casson and Wadeson (International Journal of the Economics of Business, 1998, 5, pp. 5-27) have modelled the dialogue, or conversation, which customers have with their suppliers in order to convey their requirements, while taking production implications into account. They showed that this has important implications for the positioning of the boundaries of the firm. Unfortunately, their model has the restriction that communication is only costly in the direction of customer to supplier. This paper extends their model by introducing two-way communication costs. It shows that the level of communication cost in the direction of supplier to customer is a key additional factor in determining the nature of the dialogue that takes place. It also shows that this has important additional implications for the positioning of the boundaries of the firm. Custom computer software development is used as an example of an application of the theory.

Keywords: Communication; Firm; Information; Complexity; Product Development, (search for similar items in EconPapers)
Date: 1999
View list of references

Downloads: (external link)
http://taylorandfrancis.metapress.com/link.asp?tar ... &id=4WBDPFPMFLLNK37X (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:taf:ijecbs:v:6:y:1999:i:3:p:301-329

Ordering information: This journal article can be ordered from
http://www.tandf.co.uk/journals/subscription.html

Access Statistics for this article

International Journal of the Economics of Business is edited by Eleanor Morgan and H.E. Frech

More articles in International Journal of the Economics of Business from Taylor and Francis Journals
Series data maintained by Christopher F. Baum ().