Electronic Markets and Electronic Hierarchies

The paper that connects Coase to the digital era. Information technology reduces transaction costs, and that pushes activity toward markets and away from hierarchies. When coordinating outside is cheap, firms shrink. It is one of the first works to predict what later became mass outsourcing, supplier networks and the freelance economy. Essential reading to understand that AI is not the first technology to move the Coasean frontier — it is the latest in a long series.