Decision, Transaction, Law and Contract

Carsten Allan Koch

    Publikation: Bog/antologi/afhandling/rapportDoktordisputatsForskning


    Copy from ”Preface to Post Doctoral Dissertation”
    ”Decision, transaction, law and contract”

    The period since 1970 has witnessed an explosion in contributions to what is now often referred to as the new institutional economics. One of the most influential (but also most atypical) of these approaches is transaction cost economics in the tradition of Oliver E. Williamson. The foundation for this tradition was laid by 1991 Nobel Laureate Ronald Coase in a paper, “The Nature of the Firm” in 1937. But the breakthrough as an influential research program was achieved with Williamson’s influential “Markets and Hierarchies” from 1975. Since then Williamson has, almost singlehandedly, erected an impressive research program which aims at explaining the institutional structures at the micro-level under which economic transactions take place. A number of different phenomena that were very hard to rationalize given traditional neo-classical economic theory have been analyzed using this framework. Prominent examples are analyses of vertical integration, the M-form organization and the employment relation.

    The purpose of this dissertation has been to develop the “Williamsonian” tradition in transaction cost economics further. Compared to earlier contributions, the mode of analysis employed differs in at least three ways. Firstly, the analysis is made in terms of the decision premises for entering a transactional relationship. This is in opposition to traditional transaction cost economics, where the transaction is the basic unit of analysis. Secondly, the deductive character of the arguments is clearer than in most earlier contributions. The advantage of this is that it is easier to avoid mistaken reasoning, although it is, of course, no guarantee against making it. Thirdly, emphasis is exclusively put on protection against opportunistic behaviour. This may seem like a considerable narrowing of the issues dealt with by the theory. As will be demonstrated, however, all of the behavioural assumptions and the factors or dimensions of transactions considered in the traditional analyses can be covered within this framework. Another difference between this dissertation and the majority of Williamson’s contributions is the emphasis here on developing a general model of transactions.

    The explananda of this dissertation falls in four major parts. The first explanandum is the evaluation, made by an economic actor, as to whether a particular transactional relationship will constitute a non-trivial contractual problem. Necessary and sufficient conditions for this problem condition, both in terms of a revised set of variables and a set of variables from traditional transaction cost economics, are found (chapter 7 and 8). Building upon this, three different non-triviality problem situations are presented (chapter 8).

    Following these analyses, a new contractual typology is introduced (chapter 9 and 10). The second set of explananda concerns how particular contractual forms are able to alleviate the various types of non-triviality problems identified. This analysis is made from the point of view of the actor directly hit by non-triviality (chapter 11).

    The third set of explananda is the preferences of the actor not directly hit by the non-triviality condition for the contractual forms according to the developed contractual typology. There will often be a conflict between the two actors’ preferences for a particular contractual form (chapter 12).

    The fourth explanandum concerns the conditions for the contractual forms investigated to be mutually beneficial (chapter 12).

    In the course of this dissertation, I shall sometimes criticize Oliver E. Williamson’s contributions. It seems reasonable, then, to express my admiration for his work and my belief that it represents one of the most valuable contributions made not only in the new institutional economics, but in all of economics, in this century.
    Udgivelses stedOdense
    ForlagOdense Universitet
    Antal sider487
    StatusUdgivet - 1997


    • agreement
    • asset specificity
    • bounded rationality
    • goal incongruence
    • hierarchy
    • institutional economics
    • law
    • legal system
    • opportunism
    • transaction cost economics
    • uncertainty
    • vulnerability
    • Williamson, Oliver E.
    • complexity
    • contract
    • contract law
    • decision making
    • decision, premis for making
    • opportunistic bahaviour
    • transaction cost

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