Questions tagged [transaction-costs]

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Why does the transportation of commodities yield a profit but that of gold and silver doesn't?

In Chapter I of Book IV of The Wealth of Nations, Adam Smith makes the following assertion: The transportation of commodities, when properly suited to the market, is always attended with a ...
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0answers
11 views

Is it customary for sellers to pay the commission in brokered transactions?

This question focuses on brokered transactions where 1) the intermediaries act as brokers (agents), not dealers, and 2) where both sides have an agent. In the U.S., in buying/selling houses, it is ...
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67 views

Does neoclassical economics explain or assume private property rights? [closed]

I understand that neoclassical economics is empirical, in contrast to the a priori base of Austrian economics. I therefore wonder if neoclassical economics also explains, rather than assumes, private ...
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1answer
77 views

Have the stocks and flows of hunter-gatherer economies been formally analysed?

A lot of work in economic anthropology seems to be about allocation mechanisms. This feeds into economic discourses about the institutions governing markets and non-market alternatives, e.g. Douglas ...
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Does economics explain why people prefer to live in the same home for long periods of time?

Based on actual spatial needs there would seem to be a case for changing homes more often than how often people move in practice; e.g. to respond to where a new job is located in the area, having ...
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1answer
114 views

Which mathematics are required for fully understanding the theories of the firm?

When I say "theories of the firm", I'm referring, in particular, to the theories exposed in the next works: 1) Transaction Cost Economics exposed in "Transaction Cost Economics" by ...
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1answer
16 views

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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1answer
19 views

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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1answer
162 views

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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3answers
252 views

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 ...