Can transaction cost economics explain voluntary Chambers of Commerce?

Article Abstract:

Recent research has applied transaction cost economics (TCE) to local associations of Chambers of Commerce in the UK. Particular attention has been given to the argument that Chambers are a local collective action body which offer the advantage of reduced transaction costs. It was found that companies which belong to a Chamber seem to gain considerable benefit from the wide range of services which the Chamber provides. Against this background, the connected nature of Chamber transactions is significant.

Business Associations, Chambers of Commerce, Services

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Trust, contract and economic cooperation

Article Abstract:

Social ties tend not to be incorporated in conventional economic theory, which tends to assume perfect rationality and complete contingent contracts. Economists have begun to show interest in incorporating incomplete contracts into orthodox theory. Agents can foster mutual learning through agreeing to procedural rules, and this helps trust to develop, making cooperation easier. Agents can initially take small risks and commit themselves gradually in line with the quality of interactions.

Management, Economic aspects, Business enterprises, Breach of trust

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