Transaction costs

Transaction costs are the costs associated with making commitments and enforcing them. They include the cost of the dialog and interaction between users and agents necessary for capacity to engage with demand, and the cost of ensuring fulfillment leads to enjoyment, if performance and affordance do not result in agreed outcomes. Transaction costs are higher when the experience is too painful, which makes the idea of capacity and meeting demand less attractive. Quality of experience and transaction costs are inversely related. When transaction costs are too high, then customers may seek alternatives to the service, including DIY options. Higher levels of goodwill and trust between customers and service providers, can lower the transaction costs.

Filed under: definition


TL;DR I can audit the design of a service to prevent or predict systemic failure, using a proprietary method called 16F I make intractable problems, tractable by reframing them. I then design solutions that won't create problems elsewhere, now or in the future. The solutions are in the form of services. I focus on system-level structures that give meaning and purpose to the design of lower-level constructs such as processes, interfaces, and interactions. I've spent the last 10 years obsessed with the questions: What are services? Why do they fail? Why do they exist? I'm now writing a book. Design is my dogma. Curiosity is my doctrine. Industrial engineering is my discipline. @mxiqbal

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