Features
- Cover Type: Paperback with 468 pages
- Published by: Free Press October 1, 1998
- Written in: English
- ISBN 10 Number: 068486374X
- ISBN 13 Number: 978-0684863740
-
Book Dimensions:
8.8 x 5.8 x 1.4 inches
- Weighs: 1.5 pounds
Product Review
The Academy of Management Review Oliver Williamson has written the most important book on the corporation since Berle and Means'
The Modern Corporation and Private Property. --
ReviewAlfred D. Chandler, Jr.
Harvard Business School For a historian concerned with the evolution of modern institutions, this is the most valuable book written by an economist since those of Joseph Schumpeter.
Kenneth J. Arrow Nobel Laureate in Economics [Williamson] works on a much broader canvas than before and demonstrates the power of his approach in understanding such elusive phenomena as contract relations, vertical integration, labor unions, and antitrust law.
Paul L. Joskow, Massachusetts Institute of Technology An extraordinarily impressive achievement and must reading for all serious students of law, economics, and organization
The Economic Institutions of Capitalism synthesizes Oliver Williamson's extensive work on these subjects with related work of other scholars in a comprehensive and stimulating presentation of the theory and applications of a new institutional economics that is changing the way we think about many issues in law, economics, and organization.
--This text refers to an out of print or unavailable edition of this title.
Product Review
Alfred D. Chandler, Jr.
Harvard Business School For a historian concerned with the evolution of modern institutions, this is the most valuable book written by an economist since those of Joseph Schumpeter.
Kenneth J. Arrow Nobel Laureate in Economics [Williamson] works on a much broader canvas than before and demonstrates the power of his approach in understanding such elusive phenomena as contract relations, vertical integration, labor unions, and antitrust law.
Paul L. Joskow, Massachusetts Institute of Technology An extraordinarily impressive achievement and must reading for all serious students of law, economics, and organization
The Economic Institutions of Capitalism synthesizes Oliver Williamson's extensive work on these subjects with related work of other scholars in a comprehensive and stimulating presentation of the theory and applications of a new institutional economics that is changing the way we think about many issues in law, economics, and organization.
Journal of Institutional and Theoretical Economics The Economic Institutions of Capitalism represents by far the most comprehensive treatment of the issues of economic organization and institutional choice in the economic literature to date, and given its scope and quality, is likely to remain so for the foreseeable futureEssential reading for anyone seriously concerned with the theory or public policy of contracting and organization.
The Academy of Management Review Oliver Williamson has written the most important book on the corporation since Berle and Means'
The Modern Corporation and Private Property.
--This text refers to an out of print or unavailable edition of this title.
Reader ReviewsEIoC is a classic work of new institutional economics. In it, Williamson works out his theories of transaction cost economics across an array of interesting economic questions. Most of the covered topics will be of interest not only to economists, but also to lawyers and policymakers. Among other examples, Williamson tackles such subjects as vertical integration, corporate governance, and industrial organizations. Williamson's core idea is the theory of transaction cost economics. We can analogize transaction costs to friction: they are dead weight losses that reduce efficiency. They make transactions more costly and less likely to occur. Among the most important sources of transaction costs is the limited cognitive power of human decisionmakers. Unlike the Chicago School of law and economics, which posits the traditional concept of rational choice, Williamson asserts that rationality is bounded. Put another way, he assumes that economic actors seek to maximize their expected utility, but also that the limitations of human cognition often result in decisions that fail to maximize utility. Decisionmakers inherently have limited memories, computational skills, and other mental tools, which in turn limit their ability to gather and process information. As he demonstrates, this phenomenon, known as bounded rationality, has pervasive implications for understanding how institutions work. At the policy level, transaction cost analysis is highly relevant to setting legal rules. Suppose a steam locomotive drives by a field of wheat. Sparks from the engine set crops on fire. Should the railroad company be liable? In a world of zero transaction costs, the initial assignment of rights is irrelevant. If the legal rule we choose is inefficient, the parties can bargain around it. In a world of transaction costs, however, the parties may not be able to bargain. This is likely to be true in our example. The railroad travels past the property of many landowners, who put their property to differing uses and put differing values on those uses. Negotiating an optimal solution will all of those owners would be, at best, time consuming and onerous. Hence, choosing the right rule-which is typically the rule the parties would have chosen if they were able to bargain (the so-called hypothetical bargain)-becomes quite important. In sum, highly recommended. If so, you might ask, of course, why did I subtract one star? Mainly because of Williamson's unfortunate writing style. Although EIoC is largely free of the recreational mathematics that plagues modern economic writing, which is useful for those of us who flunked Differential Equations, it is very jargon-intensive. Worse yet, much of the jargon is self-created. All of which makes reading Williamson an effort-intensive project. Usually the cost-benefit analysis nevertheless comes out in his favor, but sometimes one puzzles out the jargon to find a rather obvious point that could have been conveyed far more simply. (The business about contracting nodes, pp. 32ff, is a classic example.)
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