In this paper, optimal consumption and investment decisions are studied for an investor who has available a bank account paying a fixed rate of interested a stock whose price is a log-normal diffusion. This problem was solved by Merton and others when transactions between bank and stock are costless. Here we suppose that there are charges on all transactions equal to a fixed pwrcentage of the a...

This study of automotive transaction relationships in the U.S.A. and Japan offers abta which indicate that transaction costs do not necessarily increase with an increase in reiation-specijk investments. We empirically examine the conditions under which transactors can simultaneously achieve the twin benejits of high asset specificity and low transaction costs. This is possible because the dtffe...

We econometrically estimate the effect of transaction costs on the cost-effectiveness of the tradable permit market created during the US lead phasedown. We develop a methodology to identify transaction costs in the absence of price data. We find that refineries generally trade efficiently. We also, however, find evidence that transaction costs affect trading. We find evidence that refineries a...

The paper aims to measure transaction costs and its effects on labor market participation and on wage earnings. The observed differences between buying and selling prices of rice across households are used to calculate transaction costs indices for villages which are incorporated into the standard labor market participation and Mincer wage equations. The estimates indicate that transaction cost...

The role of transaction cost economics in developing research in strategy has been a hotly debated topic over the last decade. This paper presents the radical argument that transaction cost insights are more than mereful useful complements to existing approaches to strategy. Rather, they are necessary for adequately understanding the nature of strategizing. This is because transaction costs are...

The paper is devoted to optimal superreplication of European options in the discrete setting under proportional transaction costs on the underlying asset. In particular, general pricing and hedging algorithms are developed. This extends previous work by many authors, which has been focused on the binomial tree model and options with specific payoffs such as calls or puts, often under certain bo...

This paper explores potential channels through which information technology (IT) affects economic development. The channel emphasized here is the reduction of transaction costs through the use of information technology. We discuss the nature of transaction costs, their possible impacts on economic outcomes, and the impacts of IT on transaction costs. We provide a theoretical discussion of how a...

Many countries have adopted or are considering incentive approaches to environmental regulation, such as tradable permit schemes to control pollution. Regulators influence the success of tradable permit programs by their choice of market rules and permit allocation mechanisms. This paper uses laboratory experiments to study how the transaction costs incurred by participants interact with the in...

This paper, by introducing complexity considerations, provides a dynamic foundation for the Coase Theorem and highlights the role of transaction costs in generating inefficient outcomes in bargaining/negotiation. We show that, when the players have a preference for less complex strategies, the Coase Theorem is valid in negotiation models with repeated surplus and endogenous disagreement payoffs...

Transaction costs are an important determinant in the success or failure of community-based resource management. In particular, they can affect participation in management activities, with the poor bearing a proportionally larger share of the costs. Analysis of 309 households from the Middle-Hills of Nepal reveals that transaction costs for communal forest management as a percentage of total co...