Oliver E. Williamson

Bio: Oliver E. Williamson is an academic researcher from University of California, Berkeley. The author has contributed to research in topics: Transaction cost & Corporate governance. The author has an hindex of 80, co-authored 191 publications receiving 117766 citations. Previous affiliations of Oliver E. Williamson include University of California & University of Pennsylvania.

Deregulatory takings and breach of the regulatory contract: some precautions

Abstract: Gregory Sidak and Daniel Spulber raise a series of important and controversial issues in their article, Deregulatory Takings and Breach of the Regulatory Contract.' As the title of their article suggests, they interpret recent and prospective efforts to deregulate telecommunications and electric power networks as "takings" and recommend that regulated firms should be compensated for "stranded costs." They further argue that the "efficient component-pricing rule" (ECPR) is the appropriate rule for pricing access to the network by entrants. Throughout, they adopt a contractual approach to regulation in which (implicitly) the managers of both regulated firms and regulatory agendes are assumed to behave in a stewardship fashion. There is much in this approach with which I agree, but I also have a series of reservations. I begin with a sketch of what I see to be Sidak and Spulber's key arguments, after which I express some precautions. I KEY ARGU~MNTS

Transaction Cost Economics: The Precursors

Abstract: Building on Oliver Williamson’s original analysis, the contributors introduce new ideas, different perspectives and provide tools for better understanding changes in the approach to regulation, the reform of public utilities, and the complex problems of governance. They draw largely upon a transaction cost approach, highlighting the challenges faced by major economic sectors and identifying critical flaws in prevailing views on regulation. Deeply rooted in sector analysis, the book conveys a central message of new institutional economics: that theory should be continuously confronted by facts, and reformed or revolutionized accordingly.

On the Nature of the Firm: Some Recent Developments

Abstract: Ronald Coase's remarkable paper on "The Nature of the Firm" was originally published in 1937. Despite widespread assent that the central thesis of the paper was sound, economic research was slow to respond. As Professor Coase put it, in a paper published in 1972, his 1937 paper was "much cited but little used" (Coase [1972], p. 63). One of the reasons for this condition is that economists had been preoccupied with mathematical modelling during the intervening 35 years. As compared with production costs, transaction costs were much less tractable. The Coase paper made a persuasive case that the principal reason for the displacement of markets by hierarchies was that transaction cost savings were realized in the process (Coase [1937], pp. 336-338). Coase furthermore recognized that internal organization experienced distinctive costs of its own (ibid., pp. 340-342), whence the shift of transactions from markets to hierarchies is no cost panacea. A balance is struck when the firm has expanded to the point where "the costs of organizing an extra transaction within the firm became equal to the costs of carrying out the same transaction by means of an exchange in the open market or the costs of organizing in another firm" (ibid., p. 341). Albeit insightful and correct, this statement is also, as Alchian and Demsetz [1972], p. 783, have observed, tautological. Since a mathematical model of a tautological expression is merely a translation and adds no insight, and since such statements cannot be refuted by the data, it was unclear how follow-on research should proceed. Further progress awaited an identification of the factors that lay behind, hence varied systematically with, transaction costs. Only after these had been identified, and their relation to transaction costs indicated, could predictive statements and useful mathematical models be developed. The past ten years have witnessed progress along these lines. Among the factors that have been

The iron cage revisited institutional isomorphism and collective rationality in organizational fields

Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

Social Capital in the Creation of Human Capital

Abstract: In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

Absorptive capacity: a new perspective on learning and innovation

Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **