Transaction costs and institutions : investments in exchange
Date
01/07/2015Metadata
Show full item recordAbstract
This paper proposes a simple model for understanding transaction costs – their composition, size and policy implications. We distinguish between investments in institutions that facilitate exchange and the cost of conducting exchange itself. Institutional quality and market size are determined by the decisions of risk adverse agents and conditions are discussed under which the efficient allocation may be decentralized. We highlight a number of differences with models where transaction costs are exogenous, including the implications for taxation and measurement issues.
Citation
Nolan , C & Trew , A W 2015 , ' Transaction costs and institutions : investments in exchange ' , The B.E. Journal of Theoretical Economics , vol. 15 , no. 2 , pp. 391-432 . https://doi.org/10.1515/bejte-2013-0090
Publication
The B.E. Journal of Theoretical Economics
Status
Peer reviewed
ISSN
1935-1704Type
Journal article
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