Editing Transaction cost (section)

==  Game theory ==
In game theory, transaction costs have been studied by Anderlini and Felli (2006).<ref>{{Cite journal|last1=Anderlini|first1=Luca|last2=Felli|first2=Leonardo|date=2006|title=Transaction Costs and the Robustness of the Coase Theorem*|journal=The Economic Journal|language=en|volume=116|issue=508|pages=223–245|doi=10.1111/j.1468-0297.2006.01054.x|s2cid=3059129|issn=1468-0297|url=http://eprints.lse.ac.uk/3591/1/Transaction_costs_and_the_robustness_of_the_Coase_Theorem.pdf|doi-access=free}}</ref> They consider a model with two parties who together can generate a surplus. Both parties are needed to create the surplus. Yet, before the parties can negotiate about dividing the surplus, each party must incur transaction costs. Anderlini and Felli find that transaction costs cause a severe problem when there is a mismatch between the parties' [[bargaining power]]s and the magnitude of the transaction costs. In particular, if a party has large transaction costs but in future negotiations it can seize only a small fraction of the surplus (i.e., its bargaining power is small), then this party will not incur the transaction costs and hence the total surplus will be lost. It has been shown that the presence of transaction costs as modelled by Anderlini and Felli can overturn central insights of the Grossman-Hart-Moore [[theory of the firm]].<ref>{{Cite journal|last1=Müller|first1=Daniel|last2=Schmitz|first2=Patrick W.|date=2016|title=Transaction costs and the property rights approach to the theory of the firm|journal=European Economic Review|volume=87|pages=92–107|doi=10.1016/j.euroecorev.2016.04.013|doi-access=free}}</ref><ref>{{Cite journal|last=Schmitz|first=Patrick W.|date=2016|title=The negotiators who knew too much: Transaction costs and incomplete information|journal=Economics Letters|volume=145|pages=33–37|doi=10.1016/j.econlet.2016.05.009|doi-access=free}}</ref>