Equilibrium in a Retail Chain with Transaction Costs

The paper addressed a situation of how a retail chain consisting of suppliers, agents, and distributors transformed while the costs of transactions increased. When the costs increased, the orders and deliveries between relevant interest groups resulted in the formation of the most costs’ tolerant retail chain. The participants of the most tolerant chain remained in equilibrium under condition that in any transaction the gain of trade exceeded the transaction cost. Making to buy and sale decisions, the participants of the chain supposed to follow the rules and norms of what the author called a monotonic game