Wednesday, November 14, 2007

Transactions costs, renting, and leasing

While leasing is a topic we won't cover in class to any detail until later in the semester, a friend called all excited about ZipCars today. ZipCars allows you to rent for periods as short as as an hour.

In their words:
"Zipcar is the closest thing to owning a car without the cost and headaches. It's also more convenient, cost-effective and more fun than renting."
The call got me thinking: As technology drives down transaction costs, what other types of transactions will become economically justified. Any thoughts on what other markets might develop as transactions costs fall still further?

2 comments:

Anonymous said...

You should google "product service system" or PSS. Also check out Bag Borrow or Steal. There are others -- esoteric sports equipment, DVDs (netflix obviously but enabled through the mail is quite different than your local blockbuster), even photovoltaic cell-derived electricity through a company called SunEdison.

-Motts

Anonymous said...

another market where this is clearly happening is the publishing industry. Everything from books to music is going or will be going direct - which places a great deal of stress on content aggregators (such as cable companies) and publishers. The clearest example of this trend is the market for clasified print ads which is going the way of the dodo as the transation costs of reaching a large audience are getting slashed.