Venkat Atluri, Miklos Dietz, Nicolaus Henke [Archive.org URL]

More than 80 years ago, Nobel laureate Ronald Coase argued that companies establish their boundaries on the basis of transaction costs like these: when the cost of transacting for a product or service on the open market exceeds the cost of managing and coordinating the incremental activity needed to create that product or service internally, the company will perform the activity in-house. As digitization reduces transaction costs, it becomes economic for companies to contract out more activities, and a richer set of more specialized ecosystem relationships is facilitated.

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