Transaction Costs, History Of

Research output: Chapter in Book/Report/Conference proceedingEntry for encyclopedia/dictionary


While the basic insight that underlies the transaction cost concept is probably as old as human reflection on economic issues itself, it became associated in the 19th century with the notion of economic friction, which was subsequently expressed as a cost. Historically, the transaction cost concept has developed from narrow
interpretations typical of the monetary and general equilibrium literature towards relational interpretations, based on particular market microstructural models of how economic agents interact with each other, and finally with institutional interpretations embracing a more general analysis of economic institutions, including market and non-market forms of coordination.
Original languageEnglish
Title of host publicationThe New Palgrave Dictionary of Economics
EditorsSteven N. Durlauf, Lawrence E. Blume
Place of PublicationLondon
PublisherPalgrave Macmillan
Number of pages7
ISBN (Electronic)9780333786765
Publication statusPublished - 2008


  • Cash balances
  • Circulation cost
  • Coase, R. H
  • Contract theory
  • Coordination problem
  • Firm, theory of
  • Frictions
  • Institutional economics
  • Institutional transaction cost economics
  • Law and economics
  • Link costs
  • Modularity
  • Money
  • New institutional economics
  • Nonmarket coordination
  • Organization, economics of
  • Productive and unproductive labour
  • Property rights
  • Transaction cost economics
  • Transactions costs
  • Transactions demand for money; Marschak, J
  • Williamson, O. E


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