Life-cycle analysis (LCA) is most commonly used to inform the product design process, but here the focus is on institutional design issues - contracts, rules, and procedures that govern the behavior of individuals working in large organizations. To illustrate the issues, this study investigates the procurement, use, and disposal of microcomputers in state government agencies in Trenton, New Jersey, USA. It finds evidence of environmentally and economically suboptimal asset management, much of which can be explained and mitigated by considering the associated transaction costs. (C) 2001 Elsevier Science B.V. All rights reserved.