Williamson's Transaction Cost Economics

Williamson's Transaction Cost Economics (TCE) examines how businesses organize themselves to minimize costs associated with exchanging goods and services. This includes costs related to negotiating, enforcing contracts, and dealing with uncertainty. TCE suggests that firms choose between market transactions (buying from others) and internal production (making it themselves) based on which option will be more efficient and cost-effective. By analyzing these costs, businesses can make better decisions about how to structure their operations and relationships, ultimately leading to improved efficiency and competitiveness in the marketplace.