Transaction Costs

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收藏 2007-09-20

Transaction Costs by Douglas Allen 893 0740 TRANSACTION COSTS Douglas W. Allen Associate Professor Department of Economics - Simon Fraser University &copy; Copyright 1999 Douglas W. Allen Abstract This chapter addresses the history, use and significance of the term transaction costs. Few words in the economic language have been more abused or fought over and this is shown to result from the emergence of two distinct definitions and uses. The ‘Neoclassical’ definition rests on the costs of trading across a market, while the ‘property rights’ definition centers on the costs of establishing and enforcing property rights. In articulating these two separate definitions and in demonstrating their relationship and separate uses, it is hoped that more progress can be made in the field of transaction cost economics. JEL classification: K0, L0, L2, D0, D8 Keywords: Transaction Costs, Property Rights, Coase Theorem 1. Introduction Transaction costs. Do another two words exist in the economic lexicon that generate as much friction? Conceptually introduced in Coase’s 1937 paper ‘The Nature of the Firm’ as simply ‘the cost of using the price mechanism’ (Coase, 1988, p. 38), the words ‘transaction costs’ have evolved to the point where some skeptics claim they include any cost that is convenient and elusive enough to avoid critical examination (Niehans, 1987, p. 678). Advocates, on the other hand, have hailed the recognition of these costs as revolutionary and as important conceptually as ‘marginalism’ and ‘substitution’ (Cheung, 1983, p. 21). The ambiguity that surrounds the concept of transaction costs stems, in large part, from the existence of two literatures simultaneously claiming ownership over the term. The ‘property rights’ literature begins with Coase and has consistently focused on the role transaction costs play in determining the distribution of property rights, broadly defined as all laws, rules, social customs and organizations that generate incentives for behavior. This literature has called into question fundamental concepts like efficiency and the nature of production. Though based in neoclassical economics, this literature has evolved beyond the neoclassical model and has produced the new sub-fields of ‘law and economics’, the ‘new economic history’ and the ‘new institutional economics’.