What are Transaction Costs?

Transaction Costs, also known as transaction costs, were proposed by Coase (RH, 1937), the Nobel laureate in economics. The fundamental point of transaction cost theory is to explain the nature of the enterprise. The professional division of labor in the economic system and the operation of market price functions have produced the phenomenon of professional division of labor. However, the cost of using market price functions is relatively high, forming an enterprise mechanism. . Since transaction costs generally refer to all costs incurred to facilitate transactions, it is difficult to clearly define and list them. Different transactions often involve different types of transaction costs.

transaction cost

Transaction cost refers to the cost to reach a transaction, and also refers to the total time and

In general, a simple classification divides transaction costs into the following items (Williamson, 1975):

From the interaction between human factors and trading environment factors

The reasons for the transaction costs mentioned above can be further explored to find three characteristics derived from the transaction itself. These three characteristics form three facets that affect the level of transaction costs. (Williamson, 1985)

Asset specificity of trading commodities or assets-the assets invested by the exchange do not have

Introduction

Analysis of transaction costs under e-commerce: The cost of e-commerce refers to the software and hardware configuration, learning and use, information acquisition, online payment, information security, logistics and distribution, after-sales service, and goods required by customers in the process of production and circulation. Total cost.

Internet promotes lower transaction costs

The biggest advantage of using the Internet for e-commerce is that it can reduce transaction costs. There is sufficient information on the Internet, and as long as you sit in front of your computer, you can search for information on websites around the world. Therefore, the Internet can greatly reduce the search cost in transaction costs. Because the Internet allows producers to face consumers directly, Without the conventional multi-level distribution system, the negotiation costs and contract costs in the transaction process can be greatly reduced.

B2B promotes lower transaction costs

Although online retailers or other business-to-consumer (B2C) companies, such as Amazon or eBay, have always been the focus of media chasing, the biggest impact of the Internet on the economy comes from e-commerce in the form of business to business (B2B) activity. According to GartnerGroup's forecast, by 2003, the global turnover of US B2B e-commerce will be

E-commerce

It will reach $ 4 trillion, and online B2C retail sales are less than $ 400 billion. B2B e-commerce has reduced the company's costs in three aspects: First, it reduces procurement costs. Through the Internet, companies can easily find the lowest-priced raw material suppliers, thereby reducing transaction costs. Second, it is beneficial to better realize the supply chain. Management; Thirdly, it is conducive to achieving accurate inventory control, so that the enterprise can reduce or eliminate inventory. In this way, B2B e-commerce can reduce the production costs of enterprises by improving efficiency or crowding out supplier profits. From an economic point of view, in the supply-demand economic model, the aggregate supply curve shifts to the right.

Information technology drives productivity

Historically, the average annual growth rate of 0.25-0.5% has been a very good achievement. It is estimated that in the decades of the late 19th century, the use of rail transport increased US output by 10%. Even if the Internet itself cannot achieve such economic efficiency, the productivity growth jointly created by information technology and the Internet has reached this level effortlessly. Today, the computer, software, and telecommunications industries account for 12% of the US capital stock, which is not far behind the railway industry's share at the height of the railroad era in the late 19th century. Compared with several technological revolutions in history, information technology has certain advantages. First, unlike the railway industry, which only affects the transportation of goods, the fruits of the information technology revolution can be widely applied to many sectors of the economy, including the service industry. Secondly, after the information technology is put into use, the prices of its products, such as computers and telecommunications, have fallen sharply and faster than ever before. This will further encourage companies to use the Internet in their production activities early. The promotion of productivity growth by any new technology has a lagging effect, because it will take some time for companies to reorganize their organizations under the new technology conditions. The recent dramatic increase in productivity in the United States is the return of the computer revolution that began with the invention of the transistor 50 years ago. But as the Internet expands around the world at a rapid rate, its contribution to productivity growth will also emerge in a short period of time.