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The Business Model with Minimal Transaction Costs

  • Wei Wei
  • Wuxiang Zhu
  • Guiping Lin
Chapter
Part of the SpringerBriefs in Business book series (BRIEFSBUSINESS)

Abstract

Transactions are handled in two ways—through the market or by ownership transfer—and both incur a transaction cost. Market-based transactions initially have an information gap as a company ostensibly knows more about its own products, while customers have a clearer idea of their own preferences. The resulting negotiations to close this information gap may be time- and energy-consuming for both sides. After the transaction, long-term contracts and lockup risks occur. Long-term contract risks may lead to an independent advantage scenario when market conditions change, while the lockup risk can result in a price squeeze on the investing party. Additionally, scattered customers may suffer unfair prices or lower-than-expected quality due to a monopoly, which incurs enormous transaction cost for customers.

Keywords

Housing Price General Meeting Exchange Shop Store Manager Mortgage Loan 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Hansmann H (2000) The ownership of enterprise. Belknap Press, pp 11–12, pp 21–22Google Scholar
  2. Huet T (1997) November–December 1997, “Can coops go global? Mondragon Is trying”. Dollars & Sense and public information on the InternetGoogle Scholar
  3. Yunus M (2007) Creating a world without poverty. Public Affairs, pp 21–40Google Scholar

Copyright information

© The Author(s) 2013

Authors and Affiliations

  1. 1.HSBC Business SchoolPeking UniversityShenzhenPeople’s Republic of China
  2. 2.Finance Department, School of EconomicsTsinghua UniversityBeijingPeople’s Republic of China

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