Oliver Eaton Williamson (born September 27, 1932) is a prominent author in the area of transaction cost economics, a student of Ronald Coase, Herbert Simon and Richard Cyert. Williamson received his B.Sc. in management from the MIT Sloan School of Management in 1955, M.B.A. from Stanford University in 1960, and his Ph.D. from Carnegie Mellon University in 1963. From 1965 to 1983 he was a professor at the University of Pennsylvania. He has held professorships in business administration, economics, and law at the University of California, Berkeley since 1988 and is currently the Edgar F. Kaiser Professor Emeritus at the Haas School of Business. In 2009 he was awarded the Nobel Memorial Prize in Economics for "his analysis of economic governance, especially the boundaries of the firm",[1] sharing it with Elinor Ostrom.
His focus on the costs of transactions has led Williamson to distinguish between repeated case-by-case bargaining on the one hand and relationship-specific contracts on the other. For example, the repeated purchasing of coal from a spot market to meet the daily or weekly needs of an electric utility would represent case by case bargaining. But over time, the utility is likely to form ongoing relationships with a specific supplier, and the economics of the relationship-specific dealings will be importantly different, he has argued.
Other economists have tested Williamson's transaction-cost theories in empirical contexts. One important example is a paper by Paul L. Joskow, "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," in American Economic Review, March 1987. The incomplete contracts approach to the theory of the firm and corporate finance is partly based on the work of Williamson and Coase.[
Theory
Oliver Williamson is credited with the development of the term "Information Impactedness", which applies in situations where it is difficult to ascertain what the costs to information are. This condition exists
mainly because of uncertainty and opportunism, though bounded rationality is involved as well. It exists when true underlying circumstances relevant to the transaction, or related set of transactions, are known to one or more parties but cannot be costlessly discerned by or displayed for others.
—Market and Hierarchies
Nobel Memorial Prize in Economic Sciences
In 2009, the Royal Swedish Academy of Sciences cited Williamson and Elinor Ostrom to share the 10-million Swedish kronor (£910,000; $1.44m) prize. They were awarded the "prize for their separate work in economic governance. Williamson, the academy said, 'developed a theory where business firms served as structures for conflict resolution." He has argued that hierarchical organisations, such as companies, represent alternative governance structures, which differ in their approaches to resolving conflicts of interest.[3]
Awards and fellowships
• The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2009
• Distinguished Fellow, American Economic Association, 2007.
• Horst Claus Recktenwald Prize in Economics, 2004.
• Fellow, American Academy of Political and Social Science, 1997.
• Member, National Academy of Sciences, 1994.
• Fellow, American Academy of Arts and Sciences, 1983.
• Fellow, Econometric Society, 1977.
• Alexander Henderson Award, 1962.
Selected papers
• Oliver E. Williamson (2002). "The Theory of the Firm as Governance Structure: From Choice to Contract". Journal of Economic Perspectives 16 (3): 171–195. http://groups.haas.berkeley.edu/bpp/oew/choicetocontract.pdf. Retrieved 2009-06-06.
Books
• Markets and Hierarchies: Analysis and Antitrust Implications, 1975
• The Economic Institutions of Capitalism, 1985
• The Nature of the Firm: Origins, Evolution, and Development (co-edited with Sidney Winter), 1991
• The Mechanisms of Governance, 1996
See also
• Theory of the firm
References
1. Sveriges Riksbank's Prize in Economic Sciences in Memory of Alfred Nobel 2009, Sveriges Riksbank, 12 October 2009, http://www.riksbank.com/templates/Page.aspx?id=20286, retrieved 2009-10-12.
2. Hart, Oliver, (1995), Firms, Contracts, and Financial Structure. Oxford University Press, ISBN 0198288816.
3. http://news.bbc.co.uk/2/hi/business/8302662.stm Retrieved October-12-09
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