Chapter 92: Beyond Make-or-Buy: Advances in Transaction Cost Economics

Lyda S. Bigelow

Beyond make-or-buy: Advances in transaction cost economics Thinking about problems of economic organization from a transaction cost economics point of view takes concerted effort. Once, however, a threshold of understanding is reached, the world of organization is “spontaneously” reordered. Applications abound. … The worldview of new students who get caught up in transaction cost reasoning is irreversibly altered . A lthough Ronald Coase is often credited with inspiring a line of economic inquiry that came to be known as transaction cost economics, it is the work of Oliver Williamson, which appeared some 40 years later, that laid the foundation and provided the theoretical apparatus that has allowed scholars in this field to make headway on fundamental problems in law, economics, and the study of organizations. The magnitude of this contribution earned Williamson the Nobel Prize in Economics in 2010. This chapter sets out to familiarize the reader with central ideas ...

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