Versus TransactionCosts, TBs are added benefits associated with making a particular transaction, benefits that extend beyond those derived from the goods transacted for.

I think that TBs exist and can explain some of why people end up preferring to make some transactions over other transactions, when the other transactions are either equally priced or unequally priced (in the case where TBs make up the difference and then some, with the other transaction possibly saving a person some money).

If one does not account for TBs, the above transactions don't make much sense (the equally priced one might, as the person might just be indifferent about who they choose and just randomly chooses).


Imagine that there are two butchers from which you're able to purchase approximately the same cut of meat for the same price, such that it does not matter whether you choose one butcher over the other.

However, you know (somehow, not necessarily from past experience) that butcher B tells really funny jokes or seems to genuinely enjoy seeing you — things that you derive some additional satisfaction from —, whereas butcher A does not. Due to the fact that butcher B has these characteristics and butcher A does not, the prospect of being around butcher B (and you can be around them if you buy the cut of meat from butcher B) seems to suggest that the net benefit of you purchasing the cut of meat from butcher B would be higher than purchasing from butcher A, due to the former involving the additional satisfaction.