Questions tagged [transaction-costs]

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How does interchange fee work?

Both Mastercard and Visa are charging merchants a fee, that is called interchange fee. The customer's bank, the payment receiving bank and Visa/Mastercard gets a cut of this fee. How does this process ...
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What counts as transactions fee in Coase Theorem?

Coase Theorem says that if the transaction fee is negligible then we will have an efficient allocation of resources. In some of the samples, they quote that it doesn't matter who has the right to ...
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Trade cost on Endowment model

I think in real endowment model, if there's trade cost as 't', then the MRS should be really small or large to make a consumer trade his endowment goods. Is there any model include this trade cost or ...
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Who really pays transaction taxes like VAT or sales tax?

In Europe, shop prices are typically displayed including VAT. This gives the impression that the seller is paying the VAT. They have to offer a competitive price, then a percentage of that is taken ...
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Why is bargaining more common in poor countries?

In poor countries, one might bargain over even say a bottle of water. This is unthinkable in most rich countries. (And in countries that develop rapidly, one can actually notice the steady movement ...