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The death of Ronald Coase (1910-2013) at 102 -- almost certainly a record for any economist of note -- put an end to one of the longest and most illustrious careers in academia. Not only had Coase received the highest accolades of the profession but he was widely regarded as among the greatest and most influential economists of the past century. This was a stunning achievement, considering the fact that Coase had never received a doctorate in economics. As an undergraduate at the London School of Economics, Coase began the work that would eventually lead to 'The Nature of the Firm' (1937) -- one of the most highly cited papers in economics and the social sciences. Coase managed to remain extraordinarily influential in and simultaneously apart from the profession. He gave the impression of being unable to communicate fully with the younger academic elite, whose attention was drawn to topics and methods that he often found difficult to support or relate to. Adapted from the source document.

This paper is motivated by the remark of Coase that 'although economists claim to study the working of the market, in modern economic theory the market itself has an even more shadowy role than the firm.' It is argued that under conditions of positive transaction costs, incomplete foresight and bounded rationality - the conditions of the New Institutional Economics (NIE) - the institutional framework not only of firms but also of markets matters. Actors who plan to buy or sell a good under conditions of NIE are facing two institutional choice problems: First, to choose or establish a specific market system within which to trade the good and, second, to choose a specific exchange contract. Both are nonmarket coordination problems - the first is a problem of collective action between a multiplicity of suppliers and demanders; the second is a problem of bilateral action: the coordination of individual plans between two parties. Only the first problem is object of this paper. Our hypothesis is that the organization of markets is a collective good, which may be a product of laissez faire or of planned collective action. So far there exists no systematic theory of the NIE of markets, only a number of considerations on specific issues concerning the basic functions of trade, viz., the activities of search, inspection, bargaining, contract execution, control, and enforcement. We content ourselves to describe and comment on some prominent examples from the NIE literature and related approaches to illustrate the kind of considerations that are part of an evolving new institutional economic theory of 'the market itself'' and argue that, for reasons of the general interest of traders themselves, some forms of planned collective actions are unavoidable.

Ronald Coase, one of the most important contributors to economics during the past century, died on Sep 2, 2013, at the age of 102. During his long career as an academic economist, Coase had a great impact on the mainstream economics profession. His work became a fundamental source for the creation of two new subfields of economic studs' known as 'the new institutional economics' and 'law and economics.' He gave a great boost to the incorporation of property rights and 'transaction costs' into man types of economic analysis. Coase's pioneering work continues to inspire research that reveals more clearly how real markets operate, in contrast to the markets that the new welfare economists condemn as failures on the strength of an analysis confined to drawings and equations inscribed on the blackboard. Adapted from the source document.