Editing Transaction cost (section)

{{Short description|Cost of making any trade}}
In [[economics]], a '''transaction cost''' is a [[cost]] incurred when making an economic [[trade]] when participating in a [[Market (economics)|market]].<ref>[http://fixglobal.com/home/buy-side-firms-use-tca-to-measure-execution-performance/ Buy-side Use TCA to Measure Execution Performance], FIXGlobal, June 2010</ref> 

The idea that transactions form the basis of economic thinking was introduced by the [[Institutional economics|institutional economist]] [[John R. Commons]] in 1931. [[Oliver E. Williamson]]'s ''Transaction Cost Economics'' article, published in 2008,<ref>Williamson, O. E., [https://onlinelibrary.wiley.com/doi/epdf/10.1111/j.1745-493X.2008.00051.x Outsourcing, Transaction Cost Economics and Supply Chain Management], [[Journal of Supply Chain Management]], Volume 44, 2 Apr 2008, pages 2-82, accessed 14 February 2023</ref> popularized the concept of transaction costs.<ref name=":1" /> [[Douglass C. North]] argues that [[institution]]s, understood as the set of rules in a society, are key in the determination of [[Financial transaction|transaction]] costs. In this sense, institutions that facilitate low transaction costs can boost [[economic growth]].<ref name=":0">North, Douglass C. 1992. "Transaction costs, institutions, and economic performance", San Francisco, CA: ICS Press.</ref>

Alongside [[Cost of goods sold|production costs]], transaction costs are one of the most significant factors in business operation and management.<ref>{{Cite book |last=Young |first=Suzanne |title=Encyclopedia of Corporate Social Responsibility |date=2013 |publisher=Springer Link |isbn=978-3-642-28035-1 |pages=2547–2552 |chapter=Transaction Cost Economics |doi=10.1007/978-3-642-28036-8_221 |access-date=2020-11-01 |chapter-url=https://doi.org/10.1007/978-3-642-28036-8_221}}</ref>