EconPapers    
Economics at your fingertips  
 

Transaction Costs: Economies of Scale, Optimum, Equilibrium and Efficiency

L\'aszl\'o K\'allay, Tibor Tak\'acs and L\'aszl\'o Trautmann

Papers from arXiv.org

Abstract: The aim of this article is to propose a core game theory model of transaction costs wherein it is indicated how direct costs determine the probability of loss and subsequent transaction costs. The existence of optimum is proven, and the way in which exposure influences the location of the optimum is demonstrated. The decisions are described as a two-player game and it is discussed how the transaction cost sharing rule determines whether the optimum point of transaction costs is the same as the equilibrium of the game. A game modelling dispute between actors regarding changing the share of transaction costs to be paid by each party is also presented. Requirements of efficient transaction cost sharing rules are defined, and it is posited that a solution exists which is not unique. Policy conclusions are also devised based on principles of design of institutions to influence the nature of transaction costs.

Date: 2020-08
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://arxiv.org/pdf/2008.10348 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2008.10348

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().

 
Page updated 2020-09-26
Handle: RePEc:arx:papers:2008.10348