Clay Shirky on Transaction Costs - Dictionary of Arguments
Transaction costs/Internet/Social media/Shirky: new social tools can reduce the cost of coordinating groups.
Transaction costs were researched by Ronald Coase. (1) (See Transaction costs/Shirky).
Shirky: For example, Flickr connects people who recognize each other on photos instead of running a search using tags that are never uniformly assigned anyway. Instead of "come together and share" it is now called "Share and come together".
As a result of the new social media, transaction costs not only move moderately, as examined by R. Coase (see Transaction Costs/Coase), but they collapse. Goods and services that would never have been possible before because of the high transaction costs are now available. For example, amateur footage of catastrophes that can help emergency services coordinate.
In this way, loosely-linked groups can do things that institutions cannot do or cannot do so effectively. One of the solutions is that users can categorize their own photos, for example.
Now loosely linked groups can handle complex tasks that would not have been within the reach of larger organisations in the past, because transaction costs would have been too high.
1. R. H. Coase, Economica 4(16), November 1937, pp. 386-405, also at www.cerna.ensmp.fr/Enseignement/CoursEcoIndus/SupportsdeCours/COASE.pdf._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
Here Comes Everybody: The Power of Organizing Without Organizations New York 2009