  The aim of this article is to propose a core game theory model of transaction
costs wherein it is indicated how direct costs determine the probability of
loss and subsequent transaction costs. The existence of optimum is proven, and
the way in which exposure influences the location of the optimum is
demonstrated. The decisions are described as a two-player game and it is
discussed how the transaction cost sharing rule determines whether the optimum
point of transaction costs is the same as the equilibrium of the game. A game
modelling dispute between actors regarding changing the share of transaction
costs to be paid by each party is also presented. Requirements of efficient
transaction cost sharing rules are defined, and it is posited that a solution
exists which is not unique. Policy conclusions are also devised based on
principles of design of institutions to influence the nature of transaction
costs.
