Transaction Costs Enigma

Transaction cost is an important concept that has been introduced in the economy in the last century. But despite its analytical importance, there has not been a clear and standard definition about it. Every scholar define it in a
different way concentrating on some aspects of it. In this paper, following Allen (1991, 1999) I have classified various definitions into two broad categories .Each category has been analyzed separately. The main objective of this study was to find the relationship between property rights and transaction cost. Our finding show a strong relationship between these two. In this paper we have also shown the main approaches towards its application in practical life.