Transaction Cost Economics

Transaction Cost Economics and the Boundaries of the Firm Peter G. Klein Contracting and Organizations Research Institute Division of Applied Social Sciences University of Missouri, USA June 2006

A little about me ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

A little about me (cont.) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Transaction cost economics: background ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

A theory of everything? ,[object Object]

Williamson’s unique brand of TCE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Oliver E. Williamson (1932 – )

Key Williamsonian terms and concepts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Ex-ante versus ex-post analysis TCE as the “governance approach” to the science of contract

Vertical integration: TCE’s “paradigm problem” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Explanations for vertical coordination ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The basic TCE model ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Asset specificity and holdup ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Perfect competition, shutdown, and quasi-rents p 3 p 2 p 1 quasi-rent rent

The basic TCE model ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],spot markets fully integrated firms “ hybrids”: contracts, franchises, joint ventures ,[object Object],[object Object]

Discriminating alignment: one independent variable

Discriminating alignment: two independent variables

Note on hierarchy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Applications: the framework ,[object Object],Market Market with hazard Contracts Hierarchy Note on prices

Applications to vertical contractual relationships ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Horizontal and conglomerate boundaries ,[object Object],[object Object],[object Object]

The (new) property rights approach ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Other formal approaches ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Other formal approaches III ,[object Object],[object Object],[object Object],relational employment relational outsourcing Recurring spot employment spot outsourcing One-time Make Buy

Other formal approaches III ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Summary and conclusions ,[object Object],[object Object],[object Object],[object Object]

Transaction Cost Economics

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Transaction Cost Economics