The Riddle is Transaction Costs: That's What the Money is For!

Can a single $100 bill solve an entire town's debt crisis? This riddle is a window into transaction costs. I rely on Jeffrey Rogers Hummel's insights, adding a few thoughts of my own. And a cool letter: Ever wondered why you haggle for a car but not for your morning Starbucks's coffee?  Plus, a book recommendation: Nobel Prize-winning economist Edmund Phelps' "My Journeys in Economic Theory," a compelling read that blends economic insights with political theory.Links:David Henderson gives a statement of "the riddle"J.R. Hummel's web siteSimilar story, from LvMIHaggling:Sebastian Schweighofer-Kodritsch, "The Bargaining Trap," Games and Economic Behavior, November 2022, v. 136, pp. 249-54.Book recommendation:Edmund Phelps, My Journeys in Economic Theory.  Columbia University Press.  https://cup.columbia.edu/book/my-journeys-in-economic-theory/9780231207300 If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com ! You can follow Mike Munger on Twitter at @mungowitz