Academic journal article International Advances in Economic Research

Transaction Function

Academic journal article International Advances in Economic Research

Transaction Function

Article excerpt

JEL D00-D21

The aim of the present research is the development of analytical performance of the transaction function permitting to predict development of the institutional environment of the managing subjects.

The fundamental definitions of institutional economy allow us to select three key dependences of transactional costs from parameters of economic systems. In accordance with T. Eggertsson, a transactional cost is directly proportional to an amount of the economic agents concluding the contracts among themselves. According to R. Matthew's definition, a transactional cost is inversely proportional to an amount of the made contracts and installed norms providing execution of the given contracts.

In this case, the transaction cost will be proportional to an amount of the economic agents, who have concluded the contracts with the concrete firm, and are inversely proportional to an amount of the made contracts and informal institutes of such agreements.

In this function, the formal and informal institutes are represented as additive addends, as they supplement, but the various directions of economic activity do not overlap by the norms.

The most correct approach to the proof of sort of the transaction function lays in a set of necessary statistical information with a further improvement of coefficients of elasticity which sorts itself of the transaction function.

What main outputs can be made by offering a sort of the transaction function? …

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