The history of transaction cost economics and its recent developments
The emergence of transaction cost economics (TCE) in the early 1970s with Oliver Williamson’s successful reconciliation of the so called neoclassical approach with Herbert Simon’s organizational theory can be considered an important part of the first cognitive turn in economics. The development of TCE until the late 1980s was particularly marked by treating the firm as an avoider of negative frictions, i.e., of transaction costs. However, since the 1990s TCE has been enriched by various approaches stressing the role of the firm in creating positive value, e.g., the literature on modularity. Hence, a second cognitive turn has taken place: the firm is no longer only seen as an avoider of negative costs but also as a creator of positive knowledge.
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- Klaes, Matthias, 2000. "The History of the Concept of Transaction Costs: Neglected Aspects," Journal of the History of Economic Thought, Cambridge University Press, vol. 22(02), pages 191-216, June.
- Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-25, May.
- Nicolai J. Foss, . "Simon's Grand Theme and the Economics of Organization," IVS/CBS Working Papers 2001-9, Department of Industrial Economics and Strategy, Copenhagen Business School.
- Langlois, Richard N., 2002.
"Modularity in technology and organization,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 49(1), pages 19-37, September.
- Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-23, May.
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