Michael C. Munger - Tomorrow 3.0: Transaction Costs and the Sharing Economy

This interdisciplinary series promotes original theoretical and empirical research as well as integrative syntheses involving links between individual choice, institutions, and social outcomes. Contributions are welcome from across the social sciences, particularly in the areas where economic analysis is joined with other disciplines such as comparative political economy, new institutional economics, and behavioral economics.

Tomorrow 3.0

Transaction Costs and the Sharing Economy

Michael C. Munger

Duke University

Cambridge University Press is part of the University of Cambridge.

It furthers the Universitys mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence.

Michael C. Munger 2018

This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.

A catalogue record for this publication is available from the British Library.

Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.

To Donna Gingerella,

who showed me how to love,

&

to Skippy Squirrelbane,

who showed me how to live

No one claimed that any of their possessions was their own , but they shared everything they had .

There is a lovely apocryphal story, generally told about Dwight D. Eisenhower during his time as president of Columbia University: The school was growing, necessitating an expansion of the campus, which produced a very hot dispute between two groups of planners and architects about where the sidewalks should go. One camp insisted that it was obvious self-evident! that the sidewalks had to be arranged thus, as any rational person could see, while the other camp argued for something very different, with the same appeals to obviously, self-evident, rational evidence. Legend has it that Eisenhower solved the problem by ordering that the sidewalks not be laid down at all for a year: The students would trample paths in the grass, and the builders would then pave over where the students were actually walking. Neither of the plans that had been advocated matched what the students actually did when left to their own devices. There are two radically different ways of looking at the world embedded in that story: Are our institutions here to tell us where to go, or are they here to help smooth the way for us as we pursue our own ends, going our own ways?

A simple summary of an entire book can be misleading because it is simple, and a summary, and therefore leaves out both details and the steps in the argument. Nonetheless, it is worthwhile to provide a map, if only to help the reader identify where each step in the larger argument is located in the hilly terrain to come.