Transaction Costs and Institutions: Investments in Exchanger

Charles Nolan and Alex Trew

No 2015-70, SIRE Discussion Papers from Scottish Institute for Research in Economics (SIRE)

Abstract: This paper proposes a simple model for understanding transaction costs for 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 averse 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.

Keywords: exchange costs; transaction costs; general equilibrium; institutions (search for similar items in EconPapers)
Date: 2015-03-20
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Related works:
Journal Article: Transaction Costs and Institutions: Investments in Exchange (2015)
Working Paper: Transaction Costs and Institutions: Investments in Exchange (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:edn:sirdps:678

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