The Secret Life of Mundane Transaction Costs

Transaction costs, one often hears, are the economic equivalent of friction in physical systems. Like physicists, economists can sometimes neglect friction in formulating theories; but like engineers, they can never neglect friction in studying how the system actually does let alone should work. Interestingly, however, the present-day economics of organization also ignores friction. That is, almost single-mindedly, the literature analyzes transactions from the point of view of misaligned incentives and (especially) transaction-specific assets. The costs involved are certainly costs of running the economic system in some sense, but they are not obviously frictions. Stories about frictions in trade are not nearly as intriguing as stories about guileful trading partners and expensive assets placed at risk. But I will argue that these seemingly dull categories of cost what Baldwin and Clark (2003) call mundane transaction costs actually have a secret life. They are at least as important as, and quite probably far more important than, the more glamorous costs of asset specificity in explaining the partition between firm and market. These costs also have a secret life in another sense: they have a secret life cycle. I will argue that these mundane transaction costs provide much better material for helping us understanding how the boundaries among firms, markets, and hybrid forms change over time.

MacroH2A1 Regulation During the Cell Cycle of Mouse Embryonic Stem Cells

MacroH2A is a core histone variant that plays an important role in the X-inactivation process during differentiation of embryonic stem cells. It has been shown that macroH2A changes in localization during the cell cycle of somatic cells. This study aims to determine how macroH2A changes during the cell cycle of embryonic stem cells. Male and female mouse embryonic stem cells were transfected with a GFP::macroH2A construct and the relationship between macroH2A and the cell cycle was determined using FACS. This study shows that macroH2A is altered during the cell cycle of embryonic stem cells as it is in somatic cells and that in randomly cycling cells, there is a correlation between macroH2A expression and the phases of the cell cycle. High GFP expressing cells are mostly in the G2/M phase and low GFP expressing cells are mostly in the G1 phase. This correlation indicated that macroH2A is replicated with cellular DNA during the S phase resulting in higher expression in the G2/M phase. Future research, such as RT-PCR and differentiation experiments, is needed to further study this relationship and determine whether this change is at the protein or RNA level and how it changes during differentiation.