Nolan, C. and Trew, A. (2015) Transaction costs and institutions: investments in exchange. B.E. Journal of Theoretical Economics, 15(2), pp. 391-432. (doi: 10.1515/bejte-2013-0090)
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Abstract
This paper proposes a simple model for understanding transaction costs – 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 adverse 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.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Nolan, Professor Charles and Trew, Professor Alex |
Authors: | Nolan, C., and Trew, A. |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | B.E. Journal of Theoretical Economics |
Publisher: | De Gruyter |
ISSN: | 2194-6124 |
ISSN (Online): | 1935-1704 |
Copyright Holders: | Copyright © 2015 Walter de Gruyter GmbH. |
First Published: | First published in B.E. Journal of Theoretical Economics 15(2):391-432 |
Publisher Policy: | Reproduced in accordance with the copyright policy of the publisher |
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