Theoretical Difficulties With Transaction Cost Measurement
AbstractThe transaction cost literature continues to mature as improvements have been made on both theoretical and empirical fronts. Over the past several years, serious attempts have been made to actually measure transaction costs. Here I argue that successful measurement must solve three methodological problems: the fundamental problem of monitoring, the problem of the next best, and the insufficiency of price spreads. I argue that the key to working through these problems is to have the proper theoretical definition of transaction costs couched within a model that accounts for the institutional details in question.
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Bibliographic InfoArticle provided by World Scientific Publishing Co. Pte. Ltd. in its journal Division of Labor & Transaction Costs.
Volume (Year): 02 (2006)
Issue (Month): 01 ()
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Web page: http://www.worldscinet.com/dltc/dltc.shtml
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- Douglas Allen, 2013. "In defence of the institutional revolution," The Review of Austrian Economics, Springer, vol. 26(4), pages 397-412, December.
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