CHAPTER 7
Transaction Costs Shape Our Lives
You have seen how the architecture of our home lives is shaped by TxCs. TxCs influence whether we own and keep certain items in the house or whether we rent them. They also shape the exact spot where we keep those items in the house—are they directly on a table, or stored in a wardrobe, or buried in a box in the attic?
We put things where the aggregate TxCs to us are lowest. We have a set of unconscious mathematical equations in our heads for determining the exact place for each item; there is order behind seeming chaos. My socks go in the wardrobe in the bedroom beside my underwear, whereas my coat goes in a hallway closet near the front door—obvious and completely sensible of course, reducing my ...
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