But they make perfect sense when you consider the transaction costs of going to the market.
Buyers, Ms. Waugh said, typically pay transaction costs of about 3 to 4percentt of the purchase price.
A large proportion of the money is drained away by the transaction costs of sending money internationally.
As it did for book buying and auctioning used toys, the Internet reduces the transaction costs of meeting romantic prospects.
On Tuesday, it announced a first-quarter loss of £73.7m owing to the transaction costs of the sale.
Mr Coase also pointed out that these little planned societies impose transaction costs of their own, which tend to rise as they grow bigger.
Second, economists have pointed out the often considerable transaction costs of imposing regulation, which might make it an ineffective policy tool and harmful to social or economic welfare.
"We had a client with facilities in 23 states, and the transaction costs of issuing bonds separately in each state would have exceeded any benefits," Mr. Newman said.
Coase determined that firms spring up to minimize the "transaction costs" of marketing—namely, the costs of drawing up contracts and monitoring their implementation.
Yet, most major business organizations are arranged in bureaucratic form because hierarchy and delegated responsibility reduce the transaction costs of making decisions.
People would print their own products from off-the-shelf designs, without the transaction costs of goods made in factories the traditional way.
