The Journal of Law & Economics; Vol. 22; No. 2; pp. 233-261
Relevance is twofold:
1) when we think of service innovation by vertical extension, then we are applying transaction cost economics. We are deciding that we can avoid a holdup by providing (make) that service itself rather than from another provider (buy or ally).
2) when a service has a product element (either physical or digital) then again transact cost economics, is in play relating to that product. Do you make/create yourself, or do you buy/license it, or create alliances to increase the tie between product provider and you as service provider.
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