What the agency model can learn from other markets

This paper argues that many businesses fail to distinguish between price and transaction costs, and fatally ignore the latter while trying to reduce the former.

What the agency model can learn from other markets

Rory Sutherland

There is a lot of talk in marketing, and quite rightly, about the difference between price and value. But there is probably too little discussion about the difference between price and overall cost – in particular, the transaction costs of making a purchase.

To quote Wikipedia, 'Consider buying a banana from a store: to purchase the banana, your costs will be not only the price of the banana itself, but also the energy and effort it requires to find out which of the various banana products you prefer, where...

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