Competitive Environment: Boundaries of Economic Agent(Transactional Aspect of the Problem)

E. Kuzmin ()

Journal of Modern Competition, 2014, issue 1, 127-141

Abstract: Behavior of economic agents in the market is largely due to the desire to maximize the result of income which arises from the interaction with other actors. Impulse maximization sometimes appears in the form of extensive expansion - to increase the physical boundaries of the firm, raising its influence in the market. However, this is not always justified. Control may arise in intensive penetration by creating dependencies between counterparties. It seems that the key to understanding these processes should serve as transaction costs. Their role falls creating sustainable relationships, and seems to be exactly in their ability to form a specific ratio to engage in a dominant position in a slightly different form than traditionally seen. Building on this hypothesis article focuses on the existence of the problem of identifying the boundaries of economic agents. The apparent ease of solution of the problem faces a number of significant challenges linkages between the concepts of determining the boundaries of the institutional theory. Taking place in the methodological rigor of the contradictions is the current approach, where the boundary is something that occurs under the influence of either internal or external shocks. In resolving the issue by the author proposed integration model based on the ratio of transaction costs. The paper summarized and systematized presentation on the nature of the formation boundaries of economic agents. We show the importance of the permeability properties of the boundaries on the micro- and macrolevels in redesigning performance businesses and determining the viscosity of the economic environment (friction).

Keywords: transaction costs; boundaries of the entity; viscosity of the medium; friction force in the economic area; vistributiving (search for similar items in EconPapers)
Date: 2014
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