A Summary Of Transaction Cost Theory

Transaction Cost Theory is a branch theory of western new institutional economics. It has a rapid development and a broad application in many fields, like firm theory, organization behavior theory and so on. Many new institutional economists, like Coase, Williamson, Demsetz, Cheung,use the tool of transaction cost to build their own theories. This paper presents a detailed and general introduction of the origine and development of Transaction Cost Theory.This paper has four parts.The first part introduces the origin and foundation of Transaction Cost Theory. Before Coase raise the concept of transaction cost, Aristotle, Commons and Marx had already done some research on exchange and currency. And the works they presented were just the origin of the Transaction Cost Theory by Coase. Coase first brought the concept of transaction cost by inheriting from the formers and thinking from the premise of traditional economics. He considered that the existent of transaction cost was just the necessary condition for the firms to replace the market, and the transaction cost inside the firm also restricted the scale of the firm.Williamson followed the Coase way and make a further conclusion of transaction cost. He analyse the characteristic of the transaction from its dimensionality and made the concept more detailed and general, and made the concept easier to operate.The second part introduces the content of transaction cost. The definition of transaction cost includes its connotation and extension; Williamson...