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The Answer Is Transaction CostsAuthor: Michael Munger
"The real price of everything is the toil and trouble of acquiring it." -Adam Smith (WoN, Bk I, Chapter 5)In which the Knower of Important Things shows how transaction costs explain literally everything. Plus TWEJ, and answers to letters.If YOU have questions, submit them to our email at taitc.email@gmail.com There are two kinds of episodes here: 1. For the most part, episodes June-August are weekly, short (<20 mins), and address a few topics. 2. Episodes September-May are longer (1 hour), and monthly, with an interview with a guest.Finally, a quick note: This podcast is NOT for Stacy Hockett. He wanted you to know that..... Language: en-us Genres: News, Politics, Science, Social Sciences Contact email: Get it Feed URL: Get it iTunes ID: Get it |
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Two Bakers Walk Into A Cartel
Tuesday, 28 July, 2026
Send us Fan MailWe test a simple bakery price-fixing pact and watch it unravel, then use that failure to explain how transaction costs shape institutions, from unenforceable contracts to the rise of the corporate trust. We connect the common law doctrine of restraint of trade to the Sherman Act, modern merger fights, and a real-world egg pricing controversy where evidence is hard to untangle from supply shocks.• a two-baker cartel that collapses as soon as cheating pays• why courts historically refuse to enforce restraint of trade agreements• how the trust device unifies control and removes the need to “trust” rivals• how the Sherman Antitrust Act targets trusts and criminalizes collusion• why merger discretion creates power and invites rent seeking• why high prices and parallel pricing are not proof of conspiracy• how price indexes can reduce transaction costs and also enable coordination• two antitrust “twedges” that poke at efficiency arguments• a listener letter on lateness norms and why uncertainty mattersIf any listeners have some ideas about it, please do write in.Links:Egg producers settleBartholomae, T.C. (1923). “The Common Law on Restraint of Trade.” University Journal of Business, 1(4), 451–466. Munger, M.C. (2021). “Giants among us: do we need a new antitrust paradigm?” Constitutional Political Economy. https://doi.org/10.1007/s10602-021-09350-wSherman Antitrust Act (1890)William Baxter Joke Robert Bork, Antitrust ParadoxIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz
