In a widely used but limited sense, transaction costs refer to the cost of transferring ownership or property rights. Transaction costs are associated with buying and selling different kinds of property, including real estate, stocks and bonds, and currencies. Examples of such transaction costs include brokers' fees and salespeople's commissions, among others. In calculating the transaction costs of buying and selling any kind of property, both the costs to the seller and those of the buyer are considered.

In another sense, transaction costs as discussed in economic theory refer to the cost of anything that might be defined as a transaction. Whenever goods exchange hands, there are transaction costs. Broadly defined, transaction costs include that which would have been saved had the goods not exchanged hands. Many transaction cost studies have been conducted to determine their effect on different aspects of economic behavior and...