The History of Transaction Cost Economics and its Recent Developments

Erasmus Journal for Economics and Philosophy, Vol. 2, No. 1, pp. 29-51, Summer 2009

23 Pages Posted: 22 Oct 2009

See all articles by Lukasz Hardt

Lukasz Hardt

University of Warsaw - Department of Economics and Business

Date Written: October 20, 2009

Abstract

The emergence of transaction cost economics (TCE) in the early 1970s with Oliver Williamson’s successful reconciliation of the socalled 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.

Keywords: transaction cost economics, Oliver Williamson, theory of the firm, modularity literature, cognitive turn

JEL Classification: B21, B31, D21, D23, D83

Suggested Citation

Hardt, Lukasz, The History of Transaction Cost Economics and its Recent Developments (October 20, 2009). Erasmus Journal for Economics and Philosophy, Vol. 2, No. 1, pp. 29-51, Summer 2009, Available at SSRN: https://ssrn.com/abstract=1491752

Lukasz Hardt (Contact Author)

University of Warsaw - Department of Economics and Business ( email )

Warsaw, 00-241
Poland

HOME PAGE: http://www.wne.uw.edu.pl/lhardt

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