Market, Firms And The Logics In Economic Organization Analysis

Oliver E. Williamson's contribution to the establishment and development of TCE after Coase is irreplaceable, and for this reason he is honored as "the father of TCE". The notion of transactional dimensions and the operational theory of TCE, which he develops, have become the core of the new firm theory. It is based on Williamson's economic thought that this thesis purports to make a systemic analysis and remarks on the theory of TCE.This thesis argues that TCE with respect to firms is intrinsically a logical system of deductivism. Its pursuit of axioms and formalization has prevented itself from taking into consideration of multiple factors which influence the realistic organizations, and it tampers with and distorts the historical development with logical development, which has brought serious logical and empirical weaknesses to the analysis of economic organizations. Based on the existing relevant literature of researchers at home and abroad, this thesis draws insights from valuable research results and aims to analyze and criticize the overall framework and specific arguments of TCE on firms from the philosophical and methodological perspectives.This thesis attempts to evaluate the transaction cost economics systematically. It follows three steps: the conception and development of TCE, the theoretic factors and framework and the application of the theory-methodology. The three steps are elaborated in six chapters. The main points in each chapter are summarized as follows.Chapter One is an introduction to TCE, which aims to confine and clarify the scope of this thesis. A overall review is made on the literature of present domestic and international critiques on TCE on firms, and the significance of selected subject is made explicit. Then the methodology, the framework and main arguments of this thesis are introduces.Chapter Two provides a comment on core concepts and the development of the theory. It begins with a remark on three core concepts-transaction, transactioncost and contract, and then the development of the theory is provided critically with different perspectives of TCE on firms pinpointed. Chapter Three is mainly a critique on the behavioral assumptions - bounded rationality and opportunism - in TCE on firms. An analysis is made on the contractor's opportunism first, focusing on the weakness of unilateral analysis of opportunism in TCE on firms. Then another core assumption of bounded rationality is analyzed. Bounded rationality is widely accepted, but a built-in contradiction arises in Williamson's analyzing process to cater to the mainstream model. Finally, in the summary of this chapter, this thesis argues that contractor assumption has destroyed the core of classic model in nature and the combination of these two concepts will definitely make the TCE on firms fallen into a dilemma.Chapter Four is a comment on the theoretical framework and its core theoretical components - transaction dimensions. It begins with a review and analysis on Williamson's contributions to the transaction dimensions, which is followed by a critical analysis and comments on the asset specificity and uncertainty, the two dimensions of transaction.Chapter Five provides a remark on the application of the framework of TCE on firms to economic organization analysis as well as on two assumptions implicit in the economic organization analysis. First, a critique is carried out on basic empirical marketing assumption and market in TCE on firms. Then it is followed by remarks on the efficiency principle in the logical analysis in the economic organization analysis of that theory, three principles of economic organization design derived from efficiency principle, and M-hypothesis. Finally this thesis argues that while the theory of TCE on firms adheres to the efficiency principle, it ignores the authority characteristics of economic organizations. Chapter Six attempts to comment on the formalization and regulations of TCE on firms at the methodological level.