|analytical Q||May-Aug 2000||Sept-Dec 2000||Contact||Discussion|
The Internet is supposed to reduce transaction costs to zero. In other words, it "disintermediates" - gets rid of the intermediator, the middle man - as well as the cost of transaction - such as phone calls, paper work, and other "hassles."
Ever since I came across the words "transaction cost" in economics, I would use it to refer to the efficiency or inefficiency of getting a job done. My father used the Chinese words "ma fan" - meaning "hassle." He hates "ma fan." Anything that has high transaction costs is "ma fan."
A recent newspaper article said that most utilities in the UK have moved to the Web. Switching energy suppliers is now very easy - just a matter of reading your meter and filling out the on-line form. Has the hassle factor disappeared then?
Telecommunications deregulated long before energy. Yet when I called British Telecoms to ask to switch back to them, the sales woman took almost one hour to get my details. When can I switch, I finally asked? She told me to expect a letter in six to ten days, which would inform me of a date on which their engineer would visit my home. It has now been more than a week, and I still haven't received that letter.
Perhaps I should have gone on-line and switched instead.