Transaction costs of innovative enterprise

Abstract

The article deals with essence and classification of transaction costs, their distinctive features in case of innovative production. Transaction costs classification by necessity criterion is presented, components of information searching costs and negotiation costs as the most relevant groups of innovative production transaction costs are considered. The mathematical model of negotiations is suggested. This model defines the optimal number of negotiation rounds, determines exact total value of the contract with respect to transaction costs, and estimates the amount of transaction costs for each round. This model has practical significance and it can be used by innovative firm at the stage of commercialization. We conduct a computer experiment for finding the optimal number of rounds by minimal contract value criteria. Our results can be directly extended to real-life negotiations.