Purpose – The purpose of this paper is to examine the impact of transaction costs on economic welfare and development, and the role of information technology (IT) in reducing transaction costs. Design/methodology/approach – The paper extends the static model of Romer, in which transaction costs reduce welfare by reducing the equilibrium number of intermediate goods, and estimate the welfare los...

H incur transaction costs when choosing among off-line stores for grocery purchases. They may incur additional transaction costs when buying groceries online versus off-line. We integrate the various transaction costs into a channel choice framework and empirically quantify the relative transaction costs when households choose between the online and off-line channels of the same grocery chain. ...

All business transactions as well as achieving innovations take up resources, subsumed under the concept of transaction costs (TAC). One of the major factors in TAC theory is information. Information networks can catalyse the interpersonal information exchange and hence, increase the access to nonpublic information. Our analysis shows that information networks have an impact on the level of TAC...

Tradeable-permit systems are at the center of current interest and activity in market-based reforms of environmental policy, because these systems can offer significant advantages over conventional approaches to pollution control. Unfortunately, claims made for their relative costeffectiveness have often been exaggerated. Transaction costs, which are ubiquitous in these markets, reduce trading ...

This paper analyzes the effect of transaction costs on the social learning in an asset market with asymmetric information, sequential trading and competitive price mechanism. Both fixed and proportional transaction costs reduce the informational content of trading orders and lead to informational cascades. If transaction costs are very high, an informational cascade can occur not only when beli...