<abstract xmlns="http://www.w3.org/1999/xhtml">

<bold>Subject and purpose of work:</bold> This paper uses Cobb-Douglas optimization to formulate an optimal transaction cost algorithm within the constraint of a generalized legal framework.
<bold>Materials and methods:</bold> The author has adopted a Lagrangian approach to formulate the social utility function, then, from a set of legally allowed strategies established the Karush-Kuhn-Tucker conditions for the legal game so as to find the optimal parameters within the social utility function. Finally, the optimal transaction cost algorithm was developed.
<bold>Results:</bold> The Bordered Hessian Matrix from the partial differentials of the social utility function showed that there is a particular parameter within the social utility function which describes the optimal transaction cost. An adjustment of this parameter is essential in mechanism design for legal games.
<bold>Conclusions:</bold> The author has shown how transaction costs influence the set of strategies played by players in a legal game, and has described the essence of a social utility function and how it can be optimized.
</abstract>

Subject and purpose of work: This paper uses Cobb-Douglas optimization to formulate an optimal transaction cost algorithm within the constraint of a generalized legal framework.
Materials and methods: The author has adopted a Lagrangian approach to formulate the social utility function, then, from a set of legally allowed strategies established the Karush-Kuhn-Tucker conditions for the legal game so as to find the optimal parameters within the social utility function. Finally, the optimal transaction cost algorithm was developed.
Results: The Bordered Hessian Matrix from the partial differentials of the social utility function showed that there is a particular parameter within the social utility function which describes the optimal transaction cost. An adjustment of this parameter is essential in mechanism design for legal games.
Conclusions: The author has shown how transaction costs influence the set of strategies played by players in a legal game, and has described the essence of a social utility function and how it can be optimized.

Axiomatic Formulation of the Optimal Transaction Cost Theory in the Legal Process Through Cobb-Douglas Optimization

Economic and Regional Studies / Studia Ekonomiczne i Regionalne

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Subject and purpose of work: This paper uses Cobb-Douglas optimization to formulate an optimal transaction cost algorithm within the constraint of a...

Axiomatic Formulation of the Optimal Transaction Cost Theory in the Legal Process Through Cobb-Douglas Optimization

Published Online: Oct 11, 2021

Page range: 385 - 389

Received: Jul 01, 2020

Accepted: Sep 01, 2021

DOI: https://doi.org/10.2478/ers-2021-0027

Keywords
transaction costs, legal process, Cobb-Douglas optimization, game theory, Lagrangian approach

© 2021 Kwadwo Osei Bonsu, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Axiomatic Formulation of the Optimal Transaction Cost Theory in the Legal Process Through Cobb-Douglas Optimization

Published Online: Oct 11, 2021

Page range: 385 - 389

Received: Jul 01, 2020

Accepted: Sep 01, 2021

DOI: https://doi.org/10.2478/ers-2021-0027

Keywordstransaction costs, legal process, Cobb-Douglas optimization, game theory, Lagrangian approach

© 2021 Kwadwo Osei Bonsu, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
transaction costs, legal process, Cobb-Douglas optimization, game theory, Lagrangian approach