We consider a situation in which a group of banks consider connecting their Automated TellerMachines (ATMs) in a network, so that the banks customers may use ATMs of any bank in the network.The problem studied is that of allocating the total transaction costs arising in the network, among the...

In this paper we empirically analyze the impact of transaction costs on the performance of affine interest rate models. We test the implied (no arbitrage) Euler restrictions, and we calculate the specification error bound of Hansen and Jagannathan to measure the extent to which a model is...

This article employs Agent-Based Computational Economics (ACE) to investigate whether, and under what conditions, trust is viable in markets. The emergence and breakdown of trust is modeled in a context of multiple buyers and suppliers. Agents develop trust in a partner as a function of observed...

The question of why individual investors want dividends is investigated by submitting a questionnaire to a Dutch consumer panel.The respondents indicate that they want dividends, partly because the transaction costs of cashing in dividends are lower than the transaction costs involved in selling...

Outsourcing of non-core activities by firms is nowadays a common business strategy. This paper provides a theoretical framework for analyzing a firms’ incentive to follow such a strategy and its consequences for macroeconomic variables like growth and product variety. We divide production...

This article connects theory of learning with theory of governance, in the context of inter-firm relations.It recognizes fundamental criticism of transaction cost economics (TCE), but preserves elements from that theory.Two kinds of relational risk are identified: hold-up and spillover risk.For...

This chapter pleads for more inspiration from human nature, in agent-based modeling.As an illustration of an effort in that direction, it summarizes and discusses an agentbased model of the build-up and adaptation of trust between multiple producers and suppliers.The central question is whether,...