"Unlike networks of independent contractors, firms operate as long-term entities with established reputations and contractual relationships. This stability instills confidence in consumers, suppliers, and investors, facilitating the smooth functioning of the market. Williamson (2017) emphasizes that firms make a reliable framework for transactions by entering into long-term contracts."

Please watch the following videos:

"Essential Coase: Why Do Firms Exist?" at https://www.youtube.com/watch?v=agZVLfpscco.

"Essential Coase: Transaction Costs & Institutions at "https://www.youtube.com/watch?v=HswlAQtyqOY

Also, if you have not already done so, read the article by Yglesias (from Slate) in the Class Resources link titled "Ronald Coase, the economist who explained why we have companies."

After watching the videos and reading the Yglesias article above, is there anything else you have you learned about how firms contribute to the efficiency of the market economy in ways that networks of independent contractors do not?