BOP and Market Design Economics

Theory of the bottom of the pyramid without doubt is one of the most influential theories in the business literatures in the past decades. Prahalad suggested a new mechanism for poverty reduction; large-scale and widespread entrepreneurship is at the heart of the solution to poverty eradication (Prahalad, 2004, Page 28). This idea attracts attention of many scholars in di↵erent fields. This paper suggests that economic theories can contribute to BOP literature. This paper utilizes two influential economic theories; transaction costs and market design economics, to further enrich the BOP literature.