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Market Evolution and Economic Development
Author(s) -
Grabowski Richard
Publication year - 1999
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.1999.tb03390.x
Subject(s) - bridging (networking) , scale (ratio) , industrial organization , business , process (computing) , market integration , market economy , economics , microeconomics , computer science , geography , computer network , operating system , cartography
A bstract This paper seeks to integrate the concepts of embedded exchange and impersonal exchange via the notion of integrated markets. The more integrated market exchange is, the more likely that each potential actor in the exchange process is linked to a large number of others. As a result, it is less likely that buyers and sellers will choose to cheat each other, and market exchange thrives. Integration occurs as a result of bridging structural holes in social networks and is carried out by entrepreneurial middlemen. Their activities are characterized by significant increasing returns to scale. Thus coordination is likely to be necessary for integrated markets to develop.