Transaction mechanism

The word transaction means market exchange between buyers and sellers of particular good and service. Mechanism of markets is mainly the mechanism of transaction or transaction mechanism. We live through goods by transaction in market economy everyday.
One of the most important events in the modern economic history is the socialist countries' transition from the Soviet-type planned economy to a market economy starting in the last two decades of the 20th Century.
The main difference between a Planned Economy and a Market Economy is in transaction mechanism. In a market economy, system runs under laissez-faire policies. Transactions are free, market economy system is a free system .
But in a Planned Economy, the government makes all attempts to intervene transaction mechanism through subsidies, minimum wages, price ceilings, etc, prices may be distorted by the only seller or the only buyer with monopoly power of the government.Transactions are not free, and Planned Economy system is not a free system.
In economics, Transaction mechanism is the mechanism of market exchange.The Edgeworth box is used pastly in general equilibrium theory, and can aid in finding the competitive equilibrium of a simple system. Now game theory is the main tool for researching market transactions.WU's value equilibrium model is a new bargaining transaction model in a time series by analytical geometrypaper in transaction mechanism research.

Main Menu

See Also

Main Menu