Elgar original reference
Edited by Peter G. Klein and Michael E. Sykuta
Peter G. Klein and Michael E. Sykuta Since its emergence in the 1970s, the transaction cost approach to firms, contracts, and economic organization has become one of the most important, influential, and exciting fields in law, economics, and organization theory. On applied topics such as vertical integration, the structure of networks and alliances, franchise contracting, the multinational firm, parts of antitrust analysis, marketing channels, and more, transaction cost economics (TCE) has become a dominant, if not the mainstream, perspective. The transaction cost approach has its roots in the classic papers by Coase in 1937 and 1960, which articulated the concepts of transaction costs and property rights, and took form with the theories of the firm offered by Williamson (1971, 1979), Alchian and Demsetz (1972), and Klein et al. (1978), which introduced monitoring costs, relationship-specific investments (or ‘asset specificity’), and particular notions of governance and organizational mechanisms into the literature. TCE is expressed most strongly in Williamson’s books Markets and Hierarchies (1975), The Economic Institutions of Capitalism (1985), and The Mechanisms of Governance (1996), though important contributions come from other diverse sources. As described in the pages that follow, TCE has other important antecedents, core concepts, applications, extensions, and critiques. This volume aims to introduce the novice, and to inform the specialist, about TCE’s fundamental elements, about recent controversies and new developments, and about the place of TCE in the larger legal, economic, and managerial literatures on organizations and institutions. It does not attempt to provide a comprehensive overview of the...