Coase, Ronald H. (1910-)

Ronald H. Coase is a Nobel laureate economist from the University of Chicago. Coase was born in England and studied commerce at the London School of Economics. Coase's primary contributions to economics came from his work on the interface between law and economics and his emphasis on transaction costs.

In 1937, Coase published an article that demonstrated the importance of transaction costs in the formation of business organizations. Transaction costs refer to the costs of finding trading partners, negotiating terms of trade, and enforcing these terms. Coase argued that, to plan their production, entrepreneurs must choose between buying resources in markets or forming their own business organizations. Because transacting in markets is costly, entrepreneurs form business organizations with permanent employees and capital so they can avoid ...