Transaction cost became a prominent consideration in discussions related to externalities and ownership arrangements during the last half-century, Demsetz is now convinced that its importance in these matters is much overstated. Demsetz explains why he thinks so in this Essay. His focus is on ownership arrangements, since this conference has met to discuss one such arrangement—the gridlock economy. With less detail, he also comments on the role claimed for transaction cost in regard to externality problems.
Founded in 1959, the Arizona Law Review is a general-interest academic legal journal. The Review is edited and published quarterly by students of the University of Arizona James E. Rogers College of Law.