King Rat (gkr) wrote,
King Rat
gkr

Eco 200: lawnmower

(individual) Each of the ten families on a suburban block is likely to have its own power lawn mower. Why don't families more often share a single lawn mower? Try to enumerate the principal transaction costs that stand in the way of such a cooperative arrangement.

Arranging plans for scheduling who uses the mower, who gases it up, and who repairs it. Finding who has it now when it's not where it's scheduled to be. Collecting money for gasline and repair costs if not handled by the person who does the work. Deciding the allocation of costs to coop members.

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