Transaction costs

The concept of transaction costs developed by Ronald Coase (1910 - 2013) deviates from the neoclassical assumptions of the perfect market, including the assumption of complete and free availability of information, and thus makes a wide range of economic phenomena explainable. Transaction costs are incurred in every transaction. A transaction is the transfer of economic objects such as goods, services or receivables between at least two actors. This can take place on markets, but also within companies or families. Transaction costs are incurred in addition to the pure product costs, for example for obtaining information (which good is to be bought, what properties does it have, where can it be obtained cheaply?), implementation (travel to the dealer, conducting price negotiations, buying the product) and control (does the product contain the warranted properties, exchange). Institutions are able to reduce transaction costs considerably. For example, the regulations on warranty in sales contracts mean that the buyer does not have to test the individual product intensively before purchase, since in the event of a defect he can assert rights such as rectification, new delivery or withdrawal from the sales contract.