Institutional Economics at the Micro Level?

Journal of Economic Issues, Vol. 33, No. 2, pp. 265-75, June 1999

11 Pages Posted: 30 Mar 2006

See all articles by Huascar Pessali

Huascar Pessali

Federal University of Parana - Department of Economics

Ramon Garcia Fernandez

UFABC

Abstract

As Transaction Cost Economics evolved and entwined with the name of Oliver Williamson, it has absorbed a tension 'between an intuitive commitment to realism...and his commitment to some core presumptions of mainstream economics' [Hodgson 1998]. Most TCE scholars seem to rely on the latter commitment, and this could mean losing a chance of enriching economics in its methodological and theoretical foundations. This paper regroups and comments criticisms from 'Original' Institutional Economics (OIE) to TCE in the spirit of building bridges on: i) discrepancies among TCE's and Commons' concepts of transaction; ii) TCE's use of efficiency as a status quo rationalization; iii) the static analysis that ignores institutional feed-backs; iv) the assumption of opportunism; and v) the incompatibility of bounded rationality and optimizing behavior.

Keywords: Transaction cost economics, institutional economics, Oliver Williamson, new institutional economics, institutionalism, transaction costs, theories of the firm, economic organisation

JEL Classification: B19

Suggested Citation

Pessali, Huascar and Fernandez, Ramon Garcia, Institutional Economics at the Micro Level?. Journal of Economic Issues, Vol. 33, No. 2, pp. 265-75, June 1999, Available at SSRN: https://ssrn.com/abstract=892625

Huascar Pessali (Contact Author)

Federal University of Parana - Department of Economics ( email )

Av. Pref. Lothario Meissner, 632
Department of Economics
Curitiba, Parana 80210-170
Brazil
+55 41 33604430 (Phone)

Ramon Garcia Fernandez

UFABC ( email )

R. Arcturus, 3
São Bernardo do Campo, Sao Paulo 09606-070
Brazil

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