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Economizing

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The Palgrave Encyclopedia of Strategic Management

Abstract

Whereas neoclassical economics describes the firm as a production function (a technological construction) for which marginal analysis is used to derive efficient factor proportions, transaction cost economics describes the firm and market as alternative modes of governance that differ in discrete structural ways. The latter is a more microanalytic and organizational construction. It is also a lens of contract setup where law, economics and organization are joined and economizing is accomplished by aligning transactions with governance structures. Dynamic analysis is yet a different setup of a still more detailed kind in which innovation is featured. These are partly competing and partly complementary constructions. Each should be asked to derive refutable implications that are subject to empirical testing.

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Authors and Affiliations

  1. University of California, Berkeley, CA, USA

    Oliver E. Williamson

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  1. Oliver E. Williamson
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Correspondence to Oliver E. Williamson .

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Editors and Affiliations

  1. Stanford University , Stanford, California, USA

    Mie Augier

  2. Tusher Ctr Intellectual Capital, University of California Tusher Ctr Intellectual Capital, Berkeley, California, USA

    David J. Teece

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Williamson, O.E. (2016). Economizing. In: Augier, M., Teece, D. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-94848-2_536-1

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  • DOI: https://doi.org/10.1057/978-1-349-94848-2_536-1

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-94848-2

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