Atlantic slave trade
The Atlantic slave trade or transatlantic slave trade involved the transportation by slave traders of enslaved African people to the Americas. The slave trade used the triangular trade route and its Middle Passage, existed from the 16th to the 19th centuries; the vast majority of those who were enslaved and transported in the transatlantic slave trade were people from central and western Africa, sold by other West Africans to Western European slave traders, who brought them to the Americas. The South Atlantic and Caribbean economies were dependent on the supply of secure labour for the production of commodity crops, making goods and clothing to sell in Europe; this was crucial to those western European countries which, in the late 17th and 18th centuries, were vying with each other to create overseas empires. The Portuguese were the first to engage in the Atlantic slave trade in the 16th century. In 1526, they completed the first transatlantic slave voyage to Brazil, other European countries soon followed.
Shipowners regarded the slaves as cargo to be transported to the Americas as and cheaply as possible, there to be sold to work on coffee, cocoa and cotton plantations and silver mines, rice fields, construction industry, cutting timber for ships, in skilled labour, as domestic servants. The first Africans imported to the English colonies were classified as "indentured servants", like workers coming from England, as "apprentices for life". By the middle of the 17th century, slavery had hardened as a racial caste, with the slaves and their offspring being the property of their owners, children born to slave mothers were slaves; as property, the people were considered merchandise or units of labour, were sold at markets with other goods and services. The major Atlantic slave trading nations, ordered by trade volume, were: the Portuguese, the British, the French, the Spanish, the Dutch Empires. Several had established outposts on the African coast where they purchased slaves from local African leaders.
These slaves were managed by a factor, established on or near the coast to expedite the shipping of slaves to the New World. Slaves were kept in a factory while awaiting shipment. Current estimates are that about 12 to 12.8 million Africans were shipped across the Atlantic over a span of 400 years, although the number purchased by the traders was higher, as the passage had a high death rate. Near the beginning of the 19th century, various governments acted to ban the trade, although illegal smuggling still occurred. In the early 21st century, several governments issued apologies for the transatlantic slave trade; the Atlantic slave trade developed after trade contacts were established between the "Old World" and the "New World". For centuries, tidal currents had made ocean travel difficult and risky for the ships that were available, as such there had been little, if any, maritime contact between the peoples living in these continents. In the 15th century, new European developments in seafaring technologies resulted in ships being better equipped to deal with the tidal currents, could begin traversing the Atlantic Ocean.
Between 1600 and 1800 300,000 sailors engaged in the slave trade visited West Africa. In doing so, they came into contact with societies living along the west African coast and in the Americas which they had never encountered. Historian Pierre Chaunu termed the consequences of European navigation "disenclavement", with it marking an end of isolation for some societies and an increase in inter-societal contact for most others. Historian John Thornton noted, "A number of technical and geographical factors combined to make Europeans the most people to explore the Atlantic and develop its commerce", he identified these as being the drive to find new and profitable commercial opportunities outside Europe as well as the desire to create an alternative trade network to that controlled by the Muslim Empire of the Middle East, viewed as a commercial and religious threat to European Christendom. In particular, European traders wanted to trade for gold, which could be found in western Africa, to find a maritime route to "the Indies", where they could trade for luxury goods such as spices without having to obtain these items from Middle Eastern Islamic traders.
Although many of the initial Atlantic naval explorations were led by Iberians, members of many European nationalities were involved, including sailors from Portugal, the Italian kingdoms, England and the Netherlands. This diversity led Thornton to describe the initial "exploration of the Atlantic" as "a international exercise if many of the dramatic discoveries were made under the sponsorship of the Iberian monarchs"; that leadership gave rise to the myth that "the Iberians were the sole leaders of the exploration". Slavery was prevalent in many parts of Africa for many centuries before the beginning of the Atlantic slave trade. There is evidence that enslaved people from some parts of Africa were exported to states in Africa and Asia prior to the European colonization of the Americas; the Atlantic slave trade was not the only slave trade from Africa, although it was the largest in volume and intensity. As Elikia M'bokolo wrote in Le Monde diplomatique: The African continent was bled of its human resources via all possible routes.
Across the Sahara, through the Red Sea, from the Indian Ocean ports and across the Atlantic. At least ten centuries of slavery for the benefit of the Muslim countries... Fou
Shortages in Venezuela
Shortages in Venezuela of regulated food staples and basic necessities have been widespread following the enactment of price controls and other policies under the government of Hugo Chávez and exacerbated by the policy of withholding United States dollars from importers under the government of Nicolás Maduro. The severity of the shortages has led to the largest refugee crisis recorded in the Americas; the Maduro administration has denied the extent of the crisis. The United Nations and the Organization of American States have stated that the shortages have resulted in unnecessary deaths in Venezuela and urged the government to accept humanitarian aid. According to The New York Times, the Maduro administration was "responsible for grossly mismanaging the economy and plunging the country into a deep humanitarian crisis in which many people lack food and medical care". Maduro has stated, it has high levels of nutrients and access to food". There are shortages of milk, coffee, oil, precooked flour, toilet paper, personal hygiene products and medicines.
By January 2017, the shortage of medicines reached 85%, according to the Pharmaceutical Federation of Venezuela. Hours-long lines have become common, those who wait in them are sometimes disappointed; some Venezuelans have resorted to eating wild garbage. On 9 February 2018 a group of United Nations Special Procedures and the Special Rapporteurs on food, adequate housing and extreme poverty issued a joint statement on Venezuela that read, "Vast numbers of Venezuelans are starving, deprived of essential medicines, trying to survive in a situation, spiraling downwards with no end in sight". Since the 1990s, food production in Venezuela has dropped continuously, with Hugo Chávez's Bolivarian government beginning to rely upon imported food using the country's then-large oil profits. In 2003, the government created CADIVI, a currency control board charged with handling foreign exchange procedures to control capital flight by placing currency limits on individuals; such currency controls have been determined to be the cause of shortages according to many economists and other experts.
However, the Venezuelan government blamed other entities such as the Central Intelligence Agency and smugglers for shortages, has stated that an "economic war" had been declared on Venezuela. During the presidency of Chávez, Venezuela faced occasional shortages owing to high inflation and government financial inefficiencies. In 2005, Chávez announced the initiation of Venezuela's own "great leap forward", following the example of Mao Zedong's Great Leap Forward. An increase in shortages began to occur that year as 5% of items became unavailable according to the Central Bank of Venezuela. In January 2008, 24.7% of goods were reported to be unavailable in Venezuela, with the scarcity of goods remaining high until May 2008, when there was a shortage of 16.3% of goods. However, shortages increased again in January 2012 to nearly the same rate as in 2008. Following Chávez's death and the election of his successor Nicolás Maduro in 2013, shortage rates continued to increase and reached a record high of 28% in February 2014.
Venezuela stopped reporting its shortage data after the rate stood at 28%. In January 2015, the hashtag "AnaquelesVaciosEnVenezuela" or "EmptyShelvesInVenezuela" was the number one trending topic on Twitter in Venezuela for two days, with Venezuelans posting pictures of empty store shelves around the country. In August 2015, American private intelligence agency company Stratfor used two satellite images of Puerto Cabello, Venezuela's main port used for importing goods, to show how severe shortages had become in Venezuela. One image from February 2012 showed the ports full of shipping containers when the Venezuelan government's spending was near a historic high before the 2012 Venezuela presidential election. A second image from June 2015 shows the port with many fewer containers, since the Venezuelan government could no longer afford to import goods, as oil revenues dropped. At the end of 2015, it was estimated. By May 2016, experts feared that Venezuela was entering a period of famine, with President Maduro encouraging Venezuelans to cultivate their own food.
In January 2016, it was estimated, that the food scarcity rate was between 50% and 80%. The newly elected National Assembly, composed of opposition delegates, "declared a national food crisis" a month in February 2016. Many Venezuelans began to suffer from shortages of common utilities, such as electricity and water, because of the prolonged period of mishandling and corruption under the Maduro government. By July 2016, Venezuelans desperate for food moved to the Colombian border. Over 500 women stormed past Venezuelan National Guard troops into Colombia looking for food on 6 July 2016. By 10 July 2016, Venezuela temporarily opened its borders, closed since August 2015, for 12 hours. Over 35,000 Venezuelans traveled to Colombia for food within that period. Between 16–17 July, over 123,000 Venezuelans crossed into Colombia seeking food; the Colombian government set up. Around the same time in July 2016, reports of desperate Venezuelans rummaging through garbage for food appeared. By early 2017, priests began telling Venezuelans to label their garbage so needy individuals could feed on their refuse.
In March 2017, despite having the largest oil reserves in the world, some regions of Venezuela began having shortages o
Price ceiling
A price ceiling is a government-imposed price control, or limit, on how high a price is charged for a product, commodity, or service. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive; such conditions can occur during periods of high inflation, in the event of an investment bubble, or in the event of monopoly ownership of a product, all of which can cause problems if imposed for a long period without controlled rationing, leading to shortages. Further problems can occur if a government sets unrealistic price ceilings, causing business failures, stock crashes, or economic crises. In unregulated market economies, price ceilings do not exist. Rent control is a system; when soldiers returned from World War II and started families, which increased demand for apartments, but stopped receiving military pay, many of them could not deal with higher rents. The government put in price controls so that soldiers and their families could pay their rents and keep their homes.
However, it increased the quantity demand for apartments and lowered the quantity supplied, so the number of available apartments decreased until none were available for latecomers. Price ceilings create shortages when producers are allowed to abdicate market share or go unsubsidized. According to professors Niko Määttänen and Ari Hyytinen, price ceilings on Helsinki City Hitas apartments are inefficient economically, they cause queuing and discriminate against the handicapped, single parents and others who are not able to queue for days. They cause inefficient allocation, as apartments are not bought by those willing to pay the most for them; those who get an apartment are unwilling to leave it when their family or work situation changes, as they may not sell it at what they feel the market price should be. The inefficiencies raise the market price of other apartments. Uniform wage ceilings were introduced in Australian rules football to address uneven competition for players. In the Victorian Football League a declining competitive balance followed a 1925 expansion that had admitted Footscray and North Melbourne.
The effects on financially-weaker clubs were exacerbated in 1929 by the beginning of the Great Depression. In 1930, a new ceiling system, formulated by VFL administrator George Coulter, stipulated that individual players were to be paid no more than A£3 for a regular home-and-away match, that they must be paid if they were injured, that they could be paid no more than A£12 for a finals match, that the wages could not be augmented with other bonuses or lump-sum payments; the "Coulter law", as it became known, remained a strictly-binding price ceiling through its history. During its early years, the Coulter law adversely affected only a minority of players, such as stars and players at wealthier clubs; those individuals experienced, in effect, a drastic cut in wages. For instance, from 1931 the ceiling payment of £3 per game fell below the legal minimum award wage. While players at the more successful clubs of the day, such as Richmond, had paid higher average wages, clubs that were struggling financially could not meet the ceiling under the Coulter law.
Clubs with a longstanding amateur ethos became more competitive under the Coulter law, such as Melbourne, which had long attracted and retained players by indirect or non-financial incentives. The Coulter law led to at least one VFL star of the 1930s, Ron Todd, moving to the rival VFA, because he was dissatisfied with the maximum pay that he could receive at Collingwood,As a result of World War II, the wage for a regular game was halved for the 1942–45 seasons. After the war, the ceilings were modified several times in line with inflation. During the 1950s, the "Coulter law" was blamed for shortening the careers of star players such as John Coleman and Brian Gleeson, as they and their clubs could not pay for the private surgery that the players required to continue their careers; the Coulter law was abolished in 1968. However, in 1987 a club-level salary cap was introduced by the VFL and has been retained by its successor, the Australian Football League. On February 4, 2009, a Wall Street Journal article stated, "Last month State Farm pulled the plug on its 1.2 million homeowner policies in Florida, citing the state's punishing price controls....
State Farm's local subsidiary requested an increase of 47%, but state regulators refused. State Farm says that since 2000, it has paid $1.21 in claims and expenses for every $1 of premium income received." On January 10, 2006, a BBC article reported that since 2003, Venezuela President Hugo Chávez had been setting price ceilings on food and that the price ceilings had caused shortages and hoarding. A January 22, 2008, article from Associated Press stated, "Venezuelan troops are cracking down on the smuggling of food... the National Guard has seized about 750 tons of food.... Hugo Chavez ordered the military to keep people from smuggling scarce items like milk.... He's threatened to seize farms and milk plants...." On February 28, 2009, Chávez ordered the military to seize control of all the rice processing plants in the country temporarily and to force them to produce at full capacity. He alleged. On January 3, 2007, an International Herald Tribune article reported that Chávez's price ceilings were causing shortages of materials used in the construction indust
Grey market
A grey or gray market refers to the trade of a commodity through distribution channels that are legal but unintended by the original manufacturer or trade mark proprietor. Grey market products are products sold by a manufacturer or their authorized agent outside the terms of the agreement between the reseller and the manufacturer. Manufacturers that produce products including computer and technology equipment often sell those products through distributors. Most distribution agreements require the distributor to resell the products to end users. However, some distributors choose to resell those products to other resellers. In the late 1980s, manufacturers labeled the resold products as "grey market". There is nothing illegal about buying "grey market" products. In fact, the US Supreme Court has upheld the idea that grey market products are legal for resale in the United States regardless of where they were produced or sold; the EU Supreme Court has ruled that grey market products are legal for resale in the EU, provided that the equipment was sold by the manufacturer inside the EU.
Manufacturers created the term "grey market" in an effort to instill fear in customers that buying such equipment was somehow illegal in an effort to assure manufacturers that customers would only buy directly from them. The term "grey market" was chosen because of its similarity to the old term "black market" which refers to stolen and illegal products. In November 2016 the Court of Appeal of England and Wales confirmed a ruling in the case of R v C and Others that the sale of grey goods can be met by criminal sanctions under section 92 of the UK Trade Marks Act 1994, with a potential penalty of up to 10 years' imprisonment. Grey market goods are legal, non-counterfeit goods sold outside normal distribution channels by entities which may have no relationship with the producer of the goods; this form of parallel import occurs when the price of an item is higher in one country than another. This takes place with electronic equipment such as cameras. Entrepreneurs buy the product where it is available cheaply at retail but sometimes at wholesale, import it to the target market.
They sell it at a price high enough to provide a profit but below the normal market price. International efforts to promote free trade, including reduced tariffs and harmonised national standards, facilitate this form of arbitrage whenever manufacturers attempt to preserve disparate pricing; because of the nature of grey markets, it is difficult or impossible to track the precise numbers of grey market sales. Grey market goods are new, but some grey market goods are used goods. A market in used goods is sometimes nicknamed a green market; the two main types of grey markets are those of imported manufactured goods that would be unavailable or more expensive in a certain country and unissued securities that are not yet traded in official markets. Sometimes the term dark market is used to describe secretive, unregulated trading in commodity futures, notably crude oil in 2008; this can be considered a third type of "grey market" since it is legal, yet unregulated, not intended or explicitly authorised by oil producers.
The import of restricted or prohibited items such as prescription drugs or firearms, on the other hand, is considered black market, as is the smuggling of goods into a target country to avoid import duties. A related concept is bootlegging; the term "bootlegging" is often applied to the production or distribution of counterfeit or otherwise infringing goods. Grey markets sometimes develop for video game consoles and titles whose demand temporarily exceeds their supply causing authorised local suppliers to run out of stock; this happens during the holiday season. Other popular items, such as dolls and contraception, can be affected. In such situations, the grey market price may be higher than the manufacturer's suggested retail price, with unscrupulous sellers buying items in bulk for the express purpose of inflating the prices during resale, a practice called scalping. Online auction sites such as eBay have contributed to the emergence of the video-game grey market. Certain arcade games are marketed under different titles, such as Carrier Air Wing/US Navy, Mega Man/Rockman, Police 911/Police 24/7.
When certain arcade games are first powered on, a warning message is shown such as “his game is intended only for sale and use in ” and such a message is displayed when the game is idle, this goes to most of the games released by Konami, with its games from the late 90s until the present time. One reason for regional variations for the game title despite the same gameplay is trademark issues in different regions e.g. someone else could own the rights a particular trademark in a particular country or region though the particular game company owns the rights to the same trademark in their home country. Another reason for regional variations for the game title is to help combat bootleg arcade games at one time, including those from Japanese versions. Automobile manufacturers segment world markets by territory and price, thus creating a demand for grey import vehicles. Although some grey imports are a bargain, some buyers have discovered that their vehicles do not meet local regulations, or that parts and services are difficult to obtain because these cars are different from the versions sold throu
Economics
Economics is the social science that studies the production and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents. Microeconomics analyzes basic elements in the economy, including individual agents and markets, their interactions, the outcomes of interactions. Individual agents may include, for example, firms and sellers. Macroeconomics analyzes the entire economy and issues affecting it, including unemployment of resources, economic growth, the public policies that address these issues. See glossary of economics. Other broad distinctions within economics include those between positive economics, describing "what is", normative economics, advocating "what ought to be". Economic analysis can be applied throughout society, in business, health care, government. Economic analysis is sometimes applied to such diverse subjects as crime, the family, politics, social institutions, war and the environment; the discipline was renamed in the late 19th century due to Alfred Marshall, from "political economy" to "economics" as a shorter term for "economic science".
At that time, it became more open to rigorous thinking and made increased use of mathematics, which helped support efforts to have it accepted as a science and as a separate discipline outside of political science and other social sciences. There are a variety of modern definitions of economics. Scottish philosopher Adam Smith defined what was called political economy as "an inquiry into the nature and causes of the wealth of nations", in particular as: a branch of the science of a statesman or legislator a plentiful revenue or subsistence for the people... to supply the state or commonwealth with a revenue for the publick services. Jean-Baptiste Say, distinguishing the subject from its public-policy uses, defines it as the science of production and consumption of wealth. On the satirical side, Thomas Carlyle coined "the dismal science" as an epithet for classical economics, in this context linked to the pessimistic analysis of Malthus. John Stuart Mill defines the subject in a social context as: The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.
Alfred Marshall provides a still cited definition in his textbook Principles of Economics that extends analysis beyond wealth and from the societal to the microeconomic level: Economics is a study of man in the ordinary business of life. It enquires how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man. Lionel Robbins developed implications of what has been termed "erhaps the most accepted current definition of the subject": Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. Robbins describes the definition as not classificatory in "pick out certain kinds of behaviour" but rather analytical in "focus attention on a particular aspect of behaviour, the form imposed by the influence of scarcity." He affirmed that previous economists have centred their studies on the analysis of wealth: how wealth is created and consumed. But he said that economics can be used to study other things, such as war, that are outside its usual focus.
This is because war has as the goal winning it, generates both cost and benefits. If the war is not winnable or if the expected costs outweigh the benefits, the deciding actors may never go to war but rather explore other alternatives. We cannot define economics as the science that studies wealth, crime and any other field economic analysis can be applied to; some subsequent comments criticized the definition as overly broad in failing to limit its subject matter to analysis of markets. From the 1960s, such comments abated as the economic theory of maximizing behaviour and rational-choice modelling expanded the domain of the subject to areas treated in other fields. There are other criticisms as well, such as in scarcity not accounting for the macroeconomics of high unemployment. Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favours as "combin assumptions of maximizing behaviour, stable preferences, market equilibrium, used relentlessly and unflinchingly."
One commentary characterizes the remark as making economics an approach rather than a subject matter but with great specificity as to the "choice process and the type of social interaction that analysis involves." The same source reviews a range of definitions included in principles of economics textbooks and concludes that the lack of agreement need not affect the subject-matter that the texts treat. A
Liquor
Liquor is an alcoholic drink produced by distillation of grains, fruit, or vegetables that have gone through alcoholic fermentation. The distillation process purifies the liquid and removes diluting components like water, for the purpose of increasing its proportion of alcohol content; as liquors contain more alcohol, they are considered "harder" – in North America, the term hard liquor is used to distinguish distilled alcoholic drinks from non-distilled ones. As examples, this term does not include beverages such as beer, mead, sake, or cider, as they are fermented but not distilled; these all have a low alcohol content less than 15%. Brandy is a liquor produced by the distillation of wine, has an ABV of over 35%. Other examples of liquors include vodka, gin, tequila and whisky; the term "spirit" refers to liquor that contains no added sugar and has at least 20% alcohol by volume. Liquor bottled with added sugar and added flavorings, such as Grand Marnier and American schnapps, are known instead as liqueurs.
Liquor has an alcohol concentration higher than 30%. Beer and wine, which are not distilled, are limited to a maximum alcohol content of about 20% ABV, as most yeasts cannot metabolise when the concentration of alcohol is above this level; the origin of "liquor" and its close relative "liquid" was the Latin verb liquere, meaning "to be fluid". According to the Oxford English Dictionary, an early use of the word in the English language, meaning "a liquid", can be dated to 1225; the first use the OED mentions of its meaning "a liquid for drinking" occurred in the 14th century. Its use as a term for "an intoxicating alcoholic drink" appeared in the 16th century; the term "spirit" in reference to alcohol stems from Middle Eastern alchemy. These alchemists were more concerned with medical elixirs than with transmuting lead into gold; the vapor given off and collected during an alchemical process was called a spirit of the original material. Early evidence of distillation comes from Akkadian tablets dated circa 1200 BC describing perfumery operations, providing textual evidence that an early, primitive form of distillation was known to the Babylonians of ancient Mesopotamia.
Early evidence of distillation comes from alchemists working in Alexandria, Roman Egypt, in the 1st century. Distilled water was described in the 2nd century AD by Alexander of Aphrodisias. Alchemists in Roman Egypt were using a distillation alembic or still device in the 3rd century. Distillation was known in the ancient Indian subcontinent, evident from baked clay retorts and receivers found at Taxila and Charsadda in modern Pakistan, dating back to the early centuries of the Christian era; these "Gandhara stills" were only capable of producing weak liquor, as there was no efficient means of collecting the vapors at low heat. Distillation in China could have begun during the Eastern Han dynasty, but the distillation of beverages began in the Jin and Southern Song dynasties according to archaeological evidence. Freeze distillation involves freezing the alcoholic beverage and removing the ice; the freezing technique had limitations in geography and implementation limiting how this method was put to use.
The medieval Arabs used the distillation process extensively, there is evidence that they distilled alcohol. Al-Kindi unambiguously described the distillation of wine in the 9th century; the process spread to Italy, where evidence of the distillation of alcohol comes from the School of Salerno in southern Italy during the 12th century. In China, archaeological evidence indicates that the true distillation of alcohol began during the 12th century Jin or Southern Song dynasties. A still has been found at an archaeological site in Qinglong, dating to the 12th century. In India, the true distillation of alcohol was introduced from the Middle East, was in wide use in the Delhi Sultanate by the 14th century. Fractional distillation was developed by Taddeo Alderotti in the 13th century; the production method was written in code. In 1437, "burned water" was mentioned in the records of the County of Katzenelnbogen in Germany, it was served in a narrow glass called a Goderulffe. Claims upon the origin of specific beverages are controversial invoking national pride, but they are plausible after the 12th century AD, when Irish whiskey and German brandy became available.
These spirits would have had a much lower alcohol content than the alchemists' pure distillations, they were first thought of as medicinal elixirs. Liquor consumption rose in Europe in and after the mid-14th century, when distilled liquors were used as remedies for the Black Death. Around 1400, methods to distill spirits from wheat and rye beers, a cheaper option than grapes, were discovered, thus began the "national" drinks of Europe: jenever, Schnaps, borovička, akvavit/snaps, ouzo and poitín. The actual names emerged only in the 16th century, it is legal to distill beverage alcohol as a hobby for personal use in some countries, including New Zealand and the Netherlands. In the United States, it is illegal to distill beverage alcohol without
Transaction cost
In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market. In Transaction Costs and Economic Performance, Douglass C. North argues that institutions, understood as the set of rules in a society, are key in the determination of transaction costs. In this sense, institutions that facilitate low transaction costs, boost economic growth. Douglass North states that there are four factors that comprise transaction costs – "measurement," "enforcement," "ideological attitudes and perceptions," and "the size of the market." Measurement refers to the calculation of the value of all aspects of the good or service involved in the transaction. Enforcement can be defined as the need for an unbiased third party to ensure that neither party involved in the transaction reneges on their part of the deal; these first two factors appear in the concept of ideological attitudes and perceptions, North's third aspect of transaction costs. Ideological attitudes and perceptions encapsulate each individual's set of values, which influences their interpretation of the world.
The final aspect of transaction costs, according to North, is market size, which affects the partiality or impartiality of transactions. Transaction costs can be divided into three broad categories: Search and information costs are costs such as in determining that the required good is available on the market, which has the lowest price, etc. Bargaining costs are the costs required to come to an acceptable agreement with the other party to the transaction, drawing up an appropriate contract and so on. In game theory this is analyzed for instance in the game of chicken. On asset markets and in market microstructure, the transaction cost is some function of the distance between the bid and ask. Policing and enforcement costs are the costs of making sure the other party sticks to the terms of the contract, taking appropriate action if this turns out not to be the case. For example, the buyer of a used car faces a variety of different transaction costs; the search costs are the costs of determining the car's condition.
The bargaining costs are the costs of negotiating a price with the seller. The policing and enforcement costs are the costs of ensuring that the seller delivers the car in the promised condition; the idea that transactions form the basis of an economic thinking was introduced by the institutional economist John R. Commons, he said that: These individual actions are trans-actions instead of either individual behavior or the "exchange" of commodities. It is this shift from commodities and individuals to transactions and working rules of collective action that marks the transition from the classical and hedonic schools to the institutional schools of economic thinking; the shift is a change in the ultimate unit of economic investigation. The classic and hedonic economists, with their communistic and anarchistic offshoots, founded their theories on the relation of man to nature, but institutionalism is a relation of man to man; the smallest unit of the classic economists was a commodity produced by labor.
The smallest unit of the hedonic economists was the same or similar commodity enjoyed by ultimate consumers. One was the objective side, the other the subjective side, of the same relation between the individual and the forces of nature; the outcome, in either case, was the materialistic metaphor of an automatic equilibrium, analogous to the waves of the ocean, but personified as "seeking their level." But the smallest unit of the institutional economists is a unit of activity – a transaction, with its participants. Transactions intervene between the labor of the classic economists and the pleasures of the hedonic economists because it is society that controls access to the forces of nature, transactions are, not the "exchange of commodities," but the alienation and acquisition, between individuals, of the rights of property and liberty created by society, which must therefore be negotiated between the parties concerned before labor can produce, or consumers can consume, or commodities be physically exchanged".
The term "transaction cost" is thought to have been coined by Ronald Coase, who used it to develop a theoretical framework for predicting when certain economic tasks would be performed by firms, when they would be performed on the market. However, the term is absent from his early work up to the 1970s. While he did not coin the specific term, Coase indeed discussed "costs of using the price mechanism" in his 1937 paper The Nature of the Firm, where he first discusses the concept of transaction costs, refers to the "Costs of Market Transactions" in his seminal work, The Problem of Social Cost; the term "Transaction Costs" itself can instead be traced back to the monetary economics literature of the 1950s, does not appear to have been consciously'coined' by any particular individual. Arguably, transaction cost reasoning became most known through Oliver E. Williamson's Transaction Cost Economics. Today, transaction cost economics is used to explain a number of different behaviours; this involves considering as "transactions" not only the obvious cases of buying and selling, but day-to-day emotional interactions, informal gift exchanges, etc. Oliver E. Williamson, one of the most cited social scientist at the turn of the century, was awarded the 2009 Nobel Memorial Prize in Economics.
According to Williamson, the determinants of transaction costs are frequency, uncertainty, limited rationality, opportunistic behavior. At least two definitions of the phrase "transaction cost" are used in literature. Transaction costs have been broadly defined by Steven N. S. Cheung as any costs that are n
