Showing papers by "Oliver E. Williamson published in 1993"

Calculativeness, Trust, and Economic Organization

Abstract: M Y main purpose in this article is to explicate what Diego Gambetta has referred to as \"the elusive notion of trust.\"'' As the literature on trust reveals, and as developed here, \"trust\" is a term with many meanings. The relentless application of calculative economic reasoning is the principal device that I employ to define and delimit the elusive notion of trust. The calculative approach to economic organization is sketched in Section I. The concept of \"calculative trust,\" which enjoys widespread and growing acceptance but with which I take exception, is examined in Section II. Societal trust, which works through the institutional environment and takes a series of hyphenated forms, is briefly treated in Section III. Nearly noncalculative uses of trust of a personal kind are developed in Section IV. Concluding remarks follow in Section V.

The Nature of the Firm: Origins, Evolution, and Development

Abstract: In 1937, Ronald H. Coase published The Nature of the Firm, a ground-breaking paper which raised fundamental questions about the concept of the firm in economic theory. In this volume, leading business economists commemorate Coase's classic article and consider its relevance to economic theory today. The book includes a reprint of The Nature of the Firm, together will three lectures by Coase from 1987, which provide an account of the origins and development of his thought. The new paperback includes the first publication of the lecture which Coase delivered on winning the Nobel Prize for Economics in 1991.

Opportunism and its critics

Abstract: Although there is growing agreement that bounded rationality is the appropriate cognitive assumption for describing economic organization,' there is less agreement on how the self-interestedness of economic actors should be described. Transaction cost economics has proposed that economic agents be described as opportunistic, where this contemplates self-interest seeking with guile. That has turned out to be a controversial formulation. I begin with a brief discussion of behavioral assumptions, including an explanation of why opportunism is centrally implicated. Recent approaches to economic organization that emphasize trust are considered in the following section. The effects of suppressing opportunism are examined in the third section and conclusions follow.

The nature of the firm : origins, evolution, and development

Abstract: This volume derives from a conference held in 1987 to commemorate the fiftieth anniversary of the publication of Coase's classic article. The first chapter affords an overview of the volume. It is followed by a republication of the 1937 article, and by the three lectures Coase presented at the conference. These lectures provide a lively and informative history of the origins and development of his thought. Subsequent chapters explore a wide-range of theoretical and empirical issues that have arisen in the transaction cost economic tradition. They illustrate the power of the transaction cost approach to enhance understanding not only of business firms, but of problems of economic organization generally.

Contested Exchange versus the Governance of Contractual Relations

Abstract: There is much in the paper by Samuel Bowles and Herbert Gintis with which I agree. But there are also real differences—which is to be expected, since they and I examine economic organization through very different lenses. Thus whereas they view economic organization through the lens of power and contested exchange, I believe that economizing and governance is, for most purposes, a more productive perspective. I also have a variety of minor differences with their paper. I begin with our agreements, next consider conceptual differences, and then run through the more minor matters.

The Economic Analysis of Institutions and Organisations - in General and with Respect to Country Studies

Abstract: Institutional questions have become increasingly prominent in the evaluation of nearly every area of structural policy. The present article shows how formal economic analysis may be brought to bear on the problem of understanding institutions. It begins by reviewing the recent history of thought on the economics of organisations. It then outlines the fundamentals of transactions cost economics, a branch of economic theory which views organisations as a response to competitive pressures to align different ways of channelling or "governing" a transaction -- these governance forms include market, hybrid or hierarchy -- with the transactions requirements of different economic sectors. The paper then demonstrates the applicability of this theory, which represents a significant departure from the neo-classical theory of the firm, in such diverse areas as intermediate product markets, corporate finance and governance, the modern corporation, regulation and deregulation and the failure of ...

Calculated Trust, a Reply to Craswell's Comment on Williamson

Abstract: RICHARD CRASWELL'S interesting comment on my article makes a series of evocative points. One of these is his contention that "Robinson Crusoe could take risks, but he could not trust or distrust until he met Friday."' A second is that use of the word "trust" to describe a calculative relationship is unobjectionable if the analyst remains calculative. Consider the first and suppose that Crusoe routinely places orders with a machine that correctly processes these with probability q. The machine requires periodic maintenance, however, and Friday manually processes the orders when the machine is down. Friday is more expensive and correctly processes the orders with probability q. Is it useful to say that the risks that Crusoe took with the machine have been supplanted by trust in Friday? What is the basis of this "trust transformation"? Possibly what Craswell (and others) have in mind is that Friday, unlike the machine, can behave strategically. Reference to opportunism (strategic hazards) moves the argument in the right direction. But to ascribe trust whenever Crusoe places an order with Friday is a very thin explanation.