Cognitive Scaffold

Preparing your thinking workspace

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MENTAL MODEL · M4697

Transaction Costs

Transaction Costs
BusinessHigh supportEconomics
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

Various costs incurred during transactions, including search costs, information costs, negotiation costs, contracting costs, and enforcement costs, which hinder the smooth progress of market transactions.

SCAFFOLDING EFFECT

psychology

Reduce cognitive load

A key variable in institutional design. The existence of transaction costs explains why firms exist (Coase), why various institutional arrangements are needed, and why markets sometimes fail. Reducing transaction costs is an important way for the digital economy and platform economy to create value.

anchor

Anchor fast decisions

Search, information, negotiation, contracting, and enforcement costs in transactions hinder market exchange; their existence explains why firms exist (internalizing transactions saves costs), why institutions matter, and why markets fail; reducing transaction costs is key to value creation in the digital/platform economy.

MINIMUM ACTION

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Source support: Explicit

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    zh.wikipedia.orghttps://zh.wikipedia.org/wiki/%E4%BA%A4%E6%98%93%E6%88%90%E6%9C%ACZH · Explicit
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