Posted: 18 Oct 2010
Date Written: December 2005
This review shows that a combined law, economics, and organization theory approach leads to different and deeper understandings of the purposes served by complex contract and economic organization. The business firm for these purposes is described not in technological terms (as a production function) but in organizational terms (as an alternative mode of governance). Firm and market are thus examined comparatively with respect to their capacities to organize transactions, which differ in their complexity, so as to economize on transaction costs. The predictive theory of economic organization that results has numerous ramifications for public policy toward business and for teaching and research in the law schools.
Suggested Citation: Suggested Citation
Williamson, Oliver E., Why Law, Economics, and Organization? (December 2005). Annual Review of Law and Social Science (2005), Vol. 1, pp. 369-396, 2005. Available at SSRN: https://ssrn.com/abstract=1693343 or http://dx.doi.org/10.1146/annurev.lawsocsci.1.031805.111122