In "Positional Externalities Cause Large and Preventable Welfare Losses," Robert H. Frank notes how so-called "positional goods" may effect a redistribution of wealth in society by drawing resources into their creation that might be more efficiently allocated to other goods.
Earlier posts here and here considered the relevance of gauge theory to neoclassical economic models and concluded that invariances such as the Coase Theorem and the Miller-Modigliani theorem are conservation laws that are linked by Noether's Theorem to important symmetries in the neoclassical model.
I've been chewing this over for a while. An important question raised here is "What are transactions costs?" Somebody unfamiliar with the Coase Theorem or New Institutional Economics might naively believe the category limited to brokers' or attorneys' fees. They are not. Coase understood these costs to include, for example, the costs of searching for and identifying potential counterparties in addition to such fees. In fact, a major project for research within the field of New Institutional Economics seems to be getting precise in categorizing transactions costs.
On my view, the difficulty with categorizing transactions costs can be traced back to the fact that one person's "costs" are another person's revenue. In other words, transactions costs are deeply interwined with the symmetries or asymmetries in the bundle of goods and preferences held by potential counterparties.
Physicists have developed a very useful tool for categorizing particles based on the symmetries of the fields through which particles interact. This is gauge theory, of which Yang-Mills theory, which gives us the Standard Model, is the most well-established.
But before Yang-Mills theory there was Weyl's classical field theory. Classical field theory in physics actually bears much in common with neoclassical theory in economics. Both theories assume that symmetries in key variables are global. In neoclassical theory, if the value of some currency is inflated, then it may seem to each individual like they are richer, but because the currency value is inflated for everybody, buying power -- the value of the currency -- is the same.
By contrast, Yang-Mills (and in general any non-abelian gauge field) Theory permits for some symmetries to exist only locally. Many interesting consequences flow from the fact that global symmetries may be broken. One is path-dependence: The order in which interactions take place in Yang-Mills Theory matters to the ultimate configuration of the system. In fact, as Yang himself put it, when global symmetries are broken, "local symmetries dictate interactions".
Analogy to Yang-Mills Theory might bear fruit for economists. In particular, the methodology of categorizing interactions through local symmetry breaking could be very useful in formulating a more precise theory of transactions costs.
I will have more to say about this over time. For now, let me observe simply that most goods are produced and exchanged in discrete units. In physics terms, this means that the field of value in these goods is quantized. According to neoclassical economic theorists, this quantization shouldn't matter because goods can be exchanged indefinitely until the closest match to equilibrium is achieved.
That isn't what happens in practice, of course. To wit, what Robert H. Frank calls "nonpositional goods" are the analogs to gauge bosons of non-abelian gauge theory. Because the field of values for a good is quantized and because only local symmetries are conserved for the good, the lowest energy eqilibrium may never be reached.
But identifying "transactions costs" as the gauge bosons that result from local symmetry breaking is probably a useful insight in itself considering how difficult it has been to be precise about transactions costs in the past.