What are the criticisms of Transaction cost theory?
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The criticisms of Transaction cost theory include: the loss or misconstruing of the central managerial messages of TCE in academic debates ; the neglect of power relations, trust, and other forms of social embeddedness, as well as evolutionary considerations, such as Knightian uncertainty and market processes ; and the failure to consider the role of differential capabilities in structuring economic organization . Other critiques include the argument that TCE ignores the benefits of joint activity and trade, which have always been part of the institutional analysis of the economy . Additionally, TCE is criticized for its focus on limited rationality and opportunism, and its failure to account for factors such as uncertainty, frequency, asset characteristics, and conformity in economic operations .
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| The paper discusses various criticisms of Transaction Cost Economics (TCE), including the neglect of power relations, social embeddedness, and evolutionary considerations. | |
| The provided paper does not mention any criticisms of the transaction cost theory. | |
14 Citations | The paper provides three criticisms of transaction cost theory: 1) the underdevelopment of the theory in relation to public governance, 2) the lack of empirical validity in the context of water and sanitation services, and 3) the ambiguity in the rhetoric of TCT leading to potential ex-post justification of any governance structure. |
| The paper does not explicitly mention the criticisms of Transaction Cost Theory. |
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