Transaction cost analysis (TCA) is used to identify characteristics of distributor and manufacturer transaction costs within an MRO channel that are correlated with particular types of exchange behavior. Asset specificity, frequency of transactions, bounded rationality, and the number of viable exchange partners are theorized to be related to exchange behavior. Exchange behavior is classified into two types: discrete and relational. Each type of behavior is argued to be affected differently by transaction costs with implications for both marketing theory and application. Further, the relationship between the economic constructs of TCA and the constructs of power, conflict, and contracting behavior are explored. Resource dependence theory constructs are recast within an economic transaction cost paradigm in order to synthesize the two streams of literature.
