Signifying Williamson's Contribution to the Transaction Cost Approach: An Agent-Based Simulation of Coasean Transaction Costs and Specialization
Authored by Per L Bylund
Date Published: 2015
DOI: 10.1111/joms.12110
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AnyLogic
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Abstract
This article simulates Ronald Coase's transaction cost approach to firm
organizing using agent-based modelling, and contextualizes and contrasts
it with a division-of-labour/specialization view of the firm that Coase
challenged and sought to replace. The simulation tests the firm
formation process based on the different implications of transaction
costs and specialization as drivers of integration, focusing especially
on Coase's rejection of specialization as an explanation for integration
in the firm. The results show little support for, and suggest an
important shortcoming to, Coase's transaction cost theory. My findings
thereby indicate a potential relationship between the specialization
theory and Williamson's Transaction Cost Economics, especially the
latter's emphasis on co-specialization through relationship-specific
investments, which helps shed light on TCE's significant influence in
the theory of the firm literature.
Tags
Economics
entrepreneurship
information
Organization
Fisher body
Asset specificity
General-motors
Firm
Capabilities
Acquisition