Signifying Williamson's Contribution to Coase's Transaction Cost Approach: An Agent-Based Simulation of Transaction Costs and Specialization

Journal of Management Studies, Forthcoming

47 Pages Posted: 10 Sep 2014

See all articles by Per L. Bylund

Per L. Bylund

School of Entrepreneurship; Ratio Institute; Ludwig von Mises Institute

Date Written: July 24, 2014

Abstract

This paper simulates Ronald Coase’s transaction cost approach to firm organizing using agent-based modeling, and contextualizes and contrasts it with the earlier division-of-labor/specialization theory of the firm that Coase challenged and sought to replace. The simulation tests firm emergence by targeting the difference between the theories, especially Coase’s rejection of specialization as an explanation for integration in the firm. The results show little support for, and suggest a shortcoming to, Coase’s transaction cost theory. These findings indicate a potential relationship between the pre-Coasean theory and Williamson’s Transaction Cost Economics, which can help shed light on the latter’s significant influence in the theory of the firm.

Keywords: agent-based model, firm emergence, simulation, transaction costs

Suggested Citation

Bylund, Per L. and Bylund, Per L., Signifying Williamson's Contribution to Coase's Transaction Cost Approach: An Agent-Based Simulation of Transaction Costs and Specialization (July 24, 2014). Journal of Management Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2493715

Per L. Bylund (Contact Author)

School of Entrepreneurship ( email )

Oklahoma State University
424 Business building
Stillwater, OK 74078
United States
4057444301 (Phone)

HOME PAGE: http://https://business.okstate.edu/directory/bylund-per-694946.html

Ratio Institute ( email )

P.O. Box 3203
SE-103 64 Stockholm
Sweden

Ludwig von Mises Institute ( email )

Auburn, AL
United States

HOME PAGE: http://mises.org/bylund

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