Friction costs

Costs, both implied and direct, associated with a transaction. Such costs include time, effort, money, and associated tax effects of gathering information and making a transaction.

Friction Costs

The total cost, both direct and indirect, of a transaction after commissions, interest rates, taxes, research, time, and other expenses. For example, a student loan has a principal and interest rate, but the friction cost may include an origination fee, a federal default fee, and other expenses.

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Frictions

References in periodicals archive ?

Gilberto Llanto, president at state-run think tank Philippine Institute for Development Studies, was quoted by the AER as saying that 'the arbitrarily higher DST creates friction costs in capital markets that will aggravate our failure to develop this sector.

Tax reform lobbying continues

The credit facility will give the company a greater flexibility to pursue acquisitions and reduce interest rates and friction costs on its existing credit facilities.

-RBS Citizens Bank lends USD115m to American Realty Capital Trust

If carve-outs have one distinguishing characteristic, it is their emphasis on alternate dispute resolution and the central role of the carve-out ombudsman in reducing attorney involvement and friction costs.

Carve-Outs in Workers' Compensation: an Analysis of the Experience in the California Construction Industry

There may be many friction costs associated with buying a particular seller that decrease the value for the purchaser, such as a seller with higher than average expenses or one that will have to be re-tooled to fold into the operations of a bank or broker purchaser.

Seller beware: insurance agencies that put themselves up for sale must understand the differences between being acquired by a bank, a publicly traded producer or another privately held agency

Due to the ease of execution of synthetic transactions and the lack of friction costs (i.

Synthetic securitization

The field works down multiple paths from the insight that the economy involves friction costs and institutional constraints, It is not clear that the Arrow-Debreu paradigm corrected for complex contracting and institutionalism provides a very useful general framework for such research.

Contract Economics

I think you'll find that financial market volumes act in the opposite direction of friction costs, taxes included.