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Risks and reputations: the economics of transaction costs

Terry Burke (Deputy Head of the The School of Economic and Business Studies, University of Westminster, London, UK)

Corporate Communications: An International Journal

ISSN: 1356-3289

Article publication date: 1 January 1998

Abstract

Uncertainty means that transaction costs have to be incurred by organisations whenever they make an agreement. These costs include time and money spent searching, drawing up and enforcing contracts and in dealing with contingencies. The concept of transaction costs is traced from its originator, economist Ronald Coase, to its more recent development by David Kreps. Good reputations, themselves a product of successful corporate communications activities, tend to reduce internal and external transaction costs. Given a competitive environment those firms with lower transaction costs, as a result of high reputations, will tend to survive better than those with weak ones.

Keywords

Citation

Burke, T. (1998), "Risks and reputations: the economics of transaction costs", Corporate Communications: An International Journal, Vol. 3 No. 1, pp. 5-10. https://doi.org/10.1108/eb046547

Publisher

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MCB UP Ltd

Copyright © 1998, MCB UP Limited