That misses the point about transaction costs driving the emergence of the firm in Coase’s argument. As I recall the key transaction cost was was not really search related but that for 100 people to work together with some form of legal agreement each person must contract with 99 other people. Once the firm exists then the majority of those contracts go away and the firm contracts with 100 people and the 100 workers have no contract with one another, just the firm.
That misses the point about transaction costs driving the emergence of the firm in Coase’s argument. As I recall the key transaction cost was was not really search related but that for 100 people to work together with some form of legal agreement each person must contract with 99 other people. Once the firm exists then the majority of those contracts go away and the firm contracts with 100 people and the 100 workers have no contract with one another, just the firm.