Page info: *Author:Mathiesen, H. *Document version:2.3. *Copyright 1997-2019, H. Mathiesen.Legal notice. 


Exhibition: Decomposing costs into transaction costs and production cost


Introduction: This exhibition shows how total production cost (e.g. total gross domestic product; more info here) can be decomposed into production costs and transaction costs. Furthermore, transaction costs can in turn be decomposed in motivation costs and coordination costs (Click here to see other kinds of cost decompositions). The definition of production- and transaction costs is found in Wallis and North [1986, page 97]. They use the term transformation cost instead of production cost. The division of transaction costs into motivation and coordination costs may be found in Milgrom and Roberts [1992, page 29].


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-Copyright 1997-2019, H. Mathiesen. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.Legal notice.