New Institutional Economics is a new way to look at how organizations function. Rather than seeing the firm as a "black box", Williamson shows how decision makers respond to economic factors WITHIN the firm — what he calls "transaction cost economics" (TCE). In this series of studies, Williamson shows how complexity expands in organizations because of bounded rationality and opportunism; that is the "bad news" of his message. The "good news" is that individuals within organizations become perceptive of resulting hazards they may and do encounter, and are adept at fashioning their organizations to cope creatively with difficult situations. This creativity accounts for diversity among organizations, in which governance structures are adapted to firm - or industry-specific hazards.
Readership: Economists who specialize in industrial organization and graduate students.
Oliver E. Williamson, Edgar F. Kaiser Professor of Business Administration; Professor of Economics and Professor of Law, University of California, Berkeley
"These papers have been slightly modified and linking passages have been added to them to impose a sort of unity on them. The book is therefore an extremely convenient collection on the overall theory and some of the applications of transaction cost economics as understood by the leading exponent of those economics ... it is on the understanding of the existence of the firm and its behaviour that he has made his greatest mark ... I believe that what is read will speak for itself and for good law and economics more eloquently than I can manage here." - Journal of Law and Society
Prologue PART I: OVERVIEW 1 c Transaction Cost Economics and the Carnegie Connection: 2: Chester Barnard and the Incipient Science of Organization 3: Transaction Cost Economics PART II: CONCEPTS AND APPLICATIONS 4: Comparative Economic Organization: The Analysis of Discrete Strucutural Alternatives 5: Credible Commitments: Using Hostages to Support Exchange 6: Economic Institutions: Spontaneous and Intentional Governance 7: Corporate Finance and Corporate Governance 8: The Politics and Economics of Redistribution and Inefficiency PART III: ORGANIZATIONS 9: Transaction Cost Economics and Organization Theory 10: Calculativeness, Trust, and Economic Organization PART IV: PUBLIC POLICY 11: Delimiting Antitrust 12: Strategizing, Economizing, and Economic Organization 13: The Institutions and Governance of Economic Development and Reform PART V: CONTROVERSY AND PERSPECTIVES 14: Transaction Cost Economics Meets Posnerian Law and Economics 15: Transaction Cost Economics and the Evolving Science of Organization Glossary
