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Transaction cost theory

A short Slideshare and video on transaction cost theory.

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Transaction cost theory

  1. 1. Transaction Cost Theory Transaction costs: The costs of individual transactions, the cost incurred whenever an organisation gets someone to do something for them
  2. 2. Transaction Cost Theory Types of Transaction Costs • Search & Information • Bargaining & Decision • Policing & Enforcement Search & Information: For example: The cost of determining goods are available on the market, finding a suitable supplier which has the lowest price Bargaining & Decision: For example the cost of deciding on the purchase of a component & the cost of negotiating the best price, drawing up contracts Policing & Enforcement: The costs of ensuring the other party sticks to their terms of the agreement. For example: The cost of monitoring quality.
  3. 3. Transaction Cost Theory OpportunismBounded Rationality Factors Impacting Transaction Costs Frequency Uncertainty Asset Specificity
  4. 4. AccountingCollege.co.uk

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