Transaction cost economics and business administration

Oliver Williamson

Scandinavian Journal of Management, 2005, vol. 21, issue 1, 19-40

Abstract: This paper traces the origins of transaction cost economics to three seminal people who had an intense interest in business: Ronald Coase, Chester Barnard, and Herbert Simon. By contrast with the neoclassical theory of the firm, which is a top-down construction, the transaction cost economics theory of the firm is a bottom-up construction--which is to say that it is much more microanalytic (the transaction is made the basic unit of analysis) and is comparative in its mode of analysis. Several top-down maxims that have their origins in economic theory are examined in a bottom-up way, which serves to uncover conceptual and/or implementation problems with each. I furthermore examine growing applications of transaction cost reasoning to business administration and within the social sciences.

Keywords: Transaction; cost; Economics; Business; Administration; Real-world; Coase; Barnard; Simon (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (34)

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