Journal Article10.5465/AMR.1990.4309111
Cooperation, Opportunism, and the Invisible Hand: Implications for Transaction Cost Theory
1K
TL;DR: In this paper, the invisible hand of the market mechanism deletes actors whose behaviors are habitually opportunistic, and thus the risk of opportunism will be low, even for transactions supported by specific asset investments.
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Abstract: Transaction cost theorists have generally neglected to consider the implications that the invisible hand of the market mechanism can have for the risk of opportunism. In the long run, the invisible hand deletes actors whose behaviors are habitually opportunistic. Consequently, as markets move toward the state of competitive equilibrium, the risk of opportunism will be low, even for transactions supported by specific asset investments. Therefore, in many contexts the transaction cost rationale for internalization has been overstated.
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Robert Axelrod,William D. Hamilton +1 more
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TL;DR: In this paper, a model based on the concept of an evolutionarily stable strategy in the context of the Prisoner's Dilemma game was developed for cooperation in organisms, and the results of a computer tournament showed how cooperation based on reciprocity can get started in an asocial world, can thrive while interacting with a wide range of other strategies, and can resist invasion once fully established.
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