This paper discusses the dynamics of Transaction Cost (TC) in Industrial Symbiosis Institutions (ISI) and provides a fair and stable mechanism for TC allocation among the involved firms in a given ISI. In principle, industrial symbiosis, as an implementation of the circular economy paradigm in the context of industrial relation, is a practice aiming at reducing the material/energy footprint of the firm. The well-engineered form of this practice is proved to decrease the transaction costs at a collective level. This can be achieved using information systems for: identifying potential synergies, evaluating mutually beneficial ones, implementing the contracts, and governing the behavior of the established relations. Then the question is how to distribute the costs for maintaining such an information system in a fair and stable manner? We see such a cost as a collective transaction cost and employ an integrated method rooted in cooperative game theory and multiagent systems research to develop a fair and stable allocation mechanism for it. The novelty is twofold: in developing analytical multiagent methods for capturing the dynamics of transaction costs in industrial symbiosis and in presenting a novel game-theoretic mechanism for its allocation in industrial symbiosis institutions. While the former contributes to the theories of industrial symbiosis (methodological contribution), the latter supports decision makers aiming to specify fair and stable industrial symbiosis contracts (practical contribution).
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