We now start getting to grips with Transaction Cost Economics (TCE). If you doubt how practical the ideas of Information Economics are, you should not doubt the practicality of TCE. Malone, Yates and Benjamin (1989) were implicitly using TCE to explain how the world of business would change because of 'electronic markets' and what businesses have to do about it.
Williamson is viewed by many, particularly scholars of Strategy and Marketing, to be the father of Transaction Cost Economics (TCE), however Williamson's work was based upon the discoveries of Ronald Coase and others.
Being first with the idea or its elaboration pays off, even if it seems obscure is difficult to read, slow to gel. This early article by Oliver E. Williamson expanded upon Coase's work, then 20 years old, to further understand how transaction cost economics may account for different organisational forms. For this Williamson shared the Sveriges Riksbank Price in Economic Sciences in Memory of Alfred Nobel 2009. Elinor Ostrom for her 'analysis of economic governance, especially the commons', subject matter for another course. Williamson 'for his analysis of economic governance, especially the boundaries of the firm'.
The paper was worked into the first chapters of Williamson's influential 'Markets and Hierachies: Analysis and Antitrust Implications' (1975).
