Honesty refers to the relationship between people who believe that they can keep their promises and practice contracts. The biggest advantage of honesty is that it can reduce the transaction cost between people. R Coase, winner of the American Nobel Prize in Economics, put forward the concept of "transaction cost". In his view, in order to do any economic transaction in today's era, all kinds of expenses including time, energy and money (that is, transaction costs) must be paid, and market research, information acquisition, quality inspection, anti-counterfeiting appraisal and contract signing must be carried out. There are many reasons for enterprises to increase transaction costs outside the production link, but one of the important reasons is the lack of social integrity. Due to the prevalence of deception, counterfeiting, treachery and even fraud, enterprises have to assume that the other party is a liar when conducting transactions, and then conduct a series of credit surveys to check the quality of their products, and at the same time sign a supply and marketing contract with them and notarize it. Even in every link of the transaction, we should take pains to conclude a written agreement with it or invite witnesses recognized by both parties to be present, otherwise once the enterprise is deceived, the loss will be even greater. In this way, almost every transaction of an enterprise will cost twice or even several times the manpower, material resources and financial resources. According to the statistics of the National Bureau of Statistics, the average ineffective cost of enterprises in China (the sum of bad debts, default losses and management expenses) is 14% of sales revenue. What an amazing waste of resources! It means that every sales revenue of 10000 yuan created by China enterprises will be wasted 1400 yuan! In the case that the average profit rate of enterprises in China is only a few percent, the invalid cost loss is 14%, so what can enterprises do to make a profit? ! And honesty, only honesty, can reduce the transaction cost of enterprises. There is a simple reason. As a legal system, a code of conduct, and especially as an excellent moral quality, honesty can "simplify" the uncertainty and complexity of the trading environment faced by traders in economic activities, thus improving their understanding and coping ability with the environment. On the one hand, honesty acts on the whole process of economic transactions in the form of "social knowledge", helping traders reduce the degree of environmental uncertainty. On the other hand, honesty reduces the uncertainty of the environment with its innate tolerance, and resolves the activity and variability of the environment with its psychological certainty, so that traders can make decisions in the environment that is "restored" and "simplified" by honesty, and then successfully realize the trading purpose of obtaining "big" gains with "small" investment. This is manifested in practice: both parties regard each other as honest and trustworthy in the transaction, so they don't have to spend too much manpower, material resources and financial resources to guard against each other. For example, if you do a transaction between two enterprises with high integrity, you don't have to spend money on credit investigation, quality inspection, negotiation and signing a written contract, and you don't have to worry about the other party's failure to fulfill its obligations. In a word, the uncertainty brought by the lack of honesty and credit and the expense of wrangling are saved, which saves the transaction cost of enterprises and has high economic benefits.
There are some papers about honesty and transaction cost, because I am not an education network, so I can't copy them now.
Disciples dare not, but only read occasionally.