Oliver Williamson

Transaction cost economics is, in the main, a comparative institutional exercise.

The fundamental problem of economic organization is to organize transactions in a way that economizes on transaction costs.

The main purpose of transaction cost economics is to explain the choice of governance structures.

Bounded rationality is the cognitive assumption of transaction cost economics.

Opportunism is the behavioral assumption of transaction cost economics.

Asset specificity is the critical dimension for understanding transaction cost issues.

The firm is a governance structure.

Markets and hierarchies are alternative governance structures.

The choice between market and hierarchy is determined by the costs of transacting.

Transaction costs are the economic equivalent of friction in physical systems.

The study of economic organization is the study of transaction costs.

Institutions matter.

The purpose of economic organization is to mitigate conflict and realize mutual gains.

Contract is the central concept in transaction cost economics.

The problem of economic organization is a problem of contracting.

The study of governance is the study of how contracts are structured and enforced.

The organization of economic activity is a matter of choosing among alternative governance structures.

Transaction cost economics is an interdisciplinary enterprise.

The study of economic organization is a study of the institutional environment.

The firm is a nexus of contracts.